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LIBRARY 

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University of California. 

GIRT 0]R 

Received S-^-^^* • ^^9 / • 

Accession No.G / V / G • Class No. 



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rency is a ponderous subject and that in handling 
it they must take special pains to be interesting if 
they are to make an impression on the popular mind. 
Mr. Mitchell's arguments against silver are devel- 
oped in a breezy, Western way, with a manifest 
intention to hit hard, tempered by an honest pur- 
pose to fight fairly. He make no assertions in 
which he does not sincerely believe, and is always 
willing to do justice to the pleas of his opponents. 
We welcome his brochure as a valuable contribu- 
tion to the discussion of the sijver question from an 
honest money point of view. 

—J. H. Holmes, Editor Boston (Mass.) Herald, April 3, 1895- 



DOLLARS, 

or, WHAT? 



^^ ^^ ^^^ ^^ f^^ 



A Little Common Sense 

Applied to Silver as Money, 



^^ ^^ ^^ ^^ ^^^ 



By W. B. MITCHELL. 




NEWSPAPERS AT LIBERTV TO QUOTE FREELY, IF CREDIT IS GIVEN. 



TIMES PRINT, CHATTANOOGA, TENN. 



in 



*^^i 



n/.y f. 



COPYRIGHTED, 1896, BY W. B. MITCHELL 



The articles in the following pages are, many of them, par 
ticularly suitable on account of brevity, for newspaper clipping 
and quotation. It was the writer's purpose to make them accept 
able to the general reader by reason of simplicity of statemen 
as well as brevity. He trusts that enough merit may be founc 
in them to induce liberal quotation, which all journals are a 
liberty to make, if credit is given for same, it being through thi; 
source partly that he has hoped to reach the masses with th( 
sound doctrines he endeavors to teach. And 

To the Newspapers of the Land 

THIS LITTLE WORK IS 

l3Et>ICJRTED. 



PREKACK 



[T has occurred to the author of the following pages that nearly all 
writers on financial questions assume that readers generally under- 
stand the salient principles of finance and banking, and they there- 
fore fail to reach the understanding of the masses. And though these 
principles are few, and not mysterious, many of our most intelligent and 
capable men, particularly in professional life, have given scant attention to 
such matters ; and many men of abundant sense in agriculture and other 
pursuits have had little opportunity to stud}' them. With the view of ap- 
pealing to these good citizens, who are always desirous of forming correct 
opinions on important public issues, but who have not the time nor possi- 
bly the patience to carefully wade through conflicting newspaper com- 
ments and reports, the author has written a number of short articles on 
the most important question that has come before the American people 
since the days of slavery. He has not gone extensively into statistics, nor 
into a scientific discussion of the subjects he handles, but has merely 
grouped a few simple facts and principles and presented them in a plain, 
direct manner; such as will, he trusts, make them iinderstood by all who 
may read them. He appeals directly to the common sense of the people. 
He does not believe the financial question a complicated or a difficult one, 
as it is generally supposed to be; but on the contrary, quite understand- 
able and easy of solution if the people were agreed on the main issue ; 
and he attempts in plain language to make it as plain to others as it a 
pears to him. 

Although a banker, where he owns one dollar in bank stock he owns ten 
dollars in othor property. He believes that a bank cannot prosper unless 
the customers and the community prosper, and that the prosperity of these 
depends upon the prosperity of the country as a whole ; but if it were pos- 
sible that the prosperity of the bank he manages lay in one direction and 
the prosperity of the people and the country lay in another direction, his 
self-interest would oblige and compel him to go with the people and the 
country. He therefore speaks, not as a banker, but as an American citizen. 
He speaks, also, as a Southern man, concerned for the future of the South. 
He believes that the South has a great future under right conditions. He 
believes that the agitation of free silver is a blight upon the South, and 
(iv) 






PREFACE. V 

that its industries and enterprises must, in a measure, await the settlement 
of the free coinage issue. 

The chief and only serious plea the free silver advocates make for the 
favor of voters is that "demonetization" of silver has been the cause of 
the steady decline in most values since 1873, ^^d that its free coinage 
would restore values and advance silver to the prices of former years. 
Particular care is taken in the following pages to show the error of this 
view. 

An effort is also made to show the danger of inflation in any form, and 
that stability and confidence are the basis of all prosperity. 

Statistics given are taken from the 1894 United States government re- 
ports, unless otherwise specified, approximate figures being generally 
used. 

Certain repetition is used in some instances, with the view of making 
each article more forcible and a more complete argument within itself, the 
writer believing that short articles are more likely to be read and under- 
stood than any long and continuous exposition of the questions involved. 
The writer appeals with earnest purpose to the voter, and begs a careful, 
thoughtful reading of what he says. We all live in the same country, and 
our interests in this matter are the same. If calamity befalls us, none 
can dodge its shadow; if prosperity smiles upon us, all alike are filled 
with gladness. 

W. B. MITCHELIy. 

Chattanooga, Tenn., April 16, 1895. 




CONTENTS. 



PAG™ 



I — Voters Right Minded... 7 

2 — The Financial Question 8 

3 — Divisions of Sentiment 10 

4^~The Government Stamp on Money 12 

5 — Difference Between Demand and Time Obhgations , 15 

6 — A Double Monetary Standard. 16 

7 — Inconsistency of Free Coinage Advocates 17 

8 — Volume of Money Needed 19 

9 — Issuing Paper Against Silver 21 

10 — " Discrimination " Against Silver 23 

II — " Demonetization" of Silver 24 

12 — "The Appreciation" of Gold 25 

13 — Gold the " Money of the People" 27 

14 — The General Decline in Prices 30 

15 — Old Time Prices 32 

16 — Silver and Wheat 33 

17 — Silver and Coffee 34 

18 — Silver, Wheat and Coffee 35 

19 — Silver and Cotton 36 

20 — Silver in France 37 

21 — Free Coinage in Mexico : 38 

22 — Train Loads of Silver 39 

23 — GcJd and Silver Production 41 

24 — Fluctuations in the Silver Dollar 43 

25 — The Ratio Between Goldand Silver 45 

26 — Exports of Silver 48 

27 — Obstacles in the Way of Free Silver 48 

28— Do We Want Bimetallism? 50 

29 — Free Silver Not Free Distribution 53 

30 — Gold Standard and Prosperity 55 

31 — The Losses of 1893 57 

32 — The " Money Power" 59 

33 — "Privileges" of National Banks ' 62 

34 — Bank Note Circuladon 64 

35 — Our Indebtedness Abroad 67 

36 — How to Get More Money 69 

37 — "Coin's Financial School" 71 

38— The Rise in Coal Oil and Beef 75 

39 — " Coin's " Unit of Value 76 

40 — "Coin's" Unlimited Demand "n 

41 — " Coin's" Fatal Admission L 78 

42 — The Danger of "Coin's" Logic 80 

43 — The "Silver Bug" 82 

44 — Out of the Frying Pan Into the Fire 83 

45 — International Bimetallism 85 

46 — "Friends" of the People 87 

47 — Sound Money Clubs 89 

48— A Word to the East - 90 • 

49 — Present General Condition 92 

50 — Which Do You Prefer? 94 

51 — Note to Second Edition 95 

(vi) 




VOTERS RIGHT MINDED. 

It is a mistake to charge that all the free silver people are 
fanatics, lunatics and repudiationists. A mistake as great as 
it is to say that sound money men are "conspirators" and 
''gold bugs." Many of them are among our most useful 
and intelligent citizens, and are perfectly honest and patriotic. 
They have not seriously studied the merits of the doctrines 
they embrace, but they are as anxious as any of us to do the 
right thing and put the country in the way of prosperity. 
They are open to argument and to conviction. They somehow 
have an idea that there is a "conspiracy" to drive out silver 
and to "contract" the currency. The metal has been 
"demonetized," and that to them is an ominous and mislead- 
ing word. They do not know that much more silver has 
been coined and circulated since the alleged " demonetiza- 
tion" than before, and that we have fully seven times as much 
now as in 1873. They do not understand that free silver 
means the driving out of gold, and leaving silver and paper 
only as money. They do not understand that such calamity 
would suddenly contract the currency more than if all the 
silver in the country were dumped into the sea. Their feel- 
ings and their sentiments have been played upon by dema- 
gogues, and it is these men who deserve the severest condem- 
nation. Most of these have had opportunities of informa- 
tion, and know the falsity of their statements. But their 
business is politics. They are after fat berths in government 
service. They are, or want to be. Congressmen and Senators, 
at salaries they could not earn at home, even if they were 
willing to work. They deceive and misrepresent for a selfish 
purpose. It pays them in dollars and cents to do it. Some 
of them are high in party and national councils, and the 
people, respecting high station, have learned to respect them 
and to be guided by them. What is here said does not 
apply to all free silver politicians, nor to all politicians of 
any party or faction, but, as must be owned, it applies truth- 
fully to the grear majority of them. And the free silver 
advocates are now making more false statements and doing 

(7) 



8 DOIvIvARS, OR WHAT ? 

more mischief than any other class of office seekers. And 
there is but one way to checkmate them. That is to give 
the people the facts in such way that they may be understood. 
When this is well done the day of the free coinage trickster 
is done. 

The road to financial ruin will not be followed when the 
sign-boards are well posted. Sensible men — and most voters 
are sensible — do not rush into pitfalls when the marks are 
clear. These can and should be made clear as day. 



THE FINANCIAL QUESTION. 



i 

Amer- ^ 



The money question is now the most vital issue in 
ican politics, and it is one on which the demagogue can get 
in his most effective work. He needs no experience, prac 
tical ability, nor brains, to belabor the ^'gold bugs," and tbi 
"money power," and to talk about the "dollar of our dad^ 
dies," and the "money of the constitution.'^ 

Whether he be a brilliant but deluded theorist, a shrewd 
and designing owner of Western silver mines, or a cheap 
politician who takes the shortest cut to get votes, he is a dan- 
gerous agitator, because he appeals to popular, though mis- 
taken, prejudices. 

A combination of adverse causes and conditions depressed 
values and trade throughout the world, and the fear of a 
silver basis has intensified that depression in America. The 
free silver advocate, if he be a misguided theorist, believes, 
and if he be a silver mine owner or a mere demagogue, pre- 
tends to believe, that these conditions are the direct result 
of what he calls "demonetization" of silver. He attributes 
all legislation "unfriendly" to silver, the world ovei-^ to the 
"gold bugs," thus appealing to the prejudice of those who 
do not think or reason for themselves. His false doctrines 
are the more readily accepted because the government itself, 
first from supposed necessity during the rebellion, and since 
under the direction of unwise and compromising politicians, 
has upheld the vicious theory of fiat money and inflation. 
It first became a bank of issue, and undertook to furnish the 
people with fiat paper money, and then for purposes of in 



H 



DOLLARS, OR WHAT ? 9 

vidual gain it was saddled with the product of the Western 
silver mines, and soon began to issue fiat silver, continuing 
this dangerous experiment till the world began to doubt its 
solvency, and gave its strange system and money the cold 
shoulder. Foreign investors began to withdraw from the 
country, and the panic of 1893 was the result. The Sher- 
man law was repealed, and the issue of fiat money was 
stopped. But the weakness and folly of our financial system 
had been laid bare, and recovery was slow. Our slender gold 
reserve, which supported our great volume of fiat money, 
and our thousands of millions of credits of all kinds, was 
in evident danger. The danger was intensified when the 
Fifty-Third Congress — an incompetent, free silver body — 
assembled. And during the existence of that Congress 
the country was kept in a state of feverish anxiety and 
uncertainty. 

It is a matter of great concern to us all that we get back 
to a safe and sensible financial policy. Whether we toil at 
the desk or in the workshop, behind the counter or on the 
farm, we are each and all directly concerned in having a 
stable financial system, in the permanency and safety of 
which we, and outsiders, have absolute faith. 

We want to be paid for our labor in good money, which 
we can put by with confidence. If we buy anything with it 
we want the full worth of good money ; if we put it at inter- 
est, put it in. the bank, or invest it in securities or life insur- 
ance, we do not want it returned to us or to our families at a 
discount. We wanLto make safe, and not speculative invest- 
ments with our savings. We earn good dollars, and we do 
not want to see them depreciate and become bad dollars, 
whether in our own or in other hands. We lock up a hun- 
dred cents, or we put out a hundred cents, and we want it to 
remain a hundred cents. We do not want it to shrink to 
seventy-five cents or to fifty cents while we are about our 
work or our business. We do not want to go to bed at night 
with a dollar and get up in the morning with less than a . 
dollar. We do not want an uncertain or a fluctuating cur- 
rency. If we are wise we want the standard of all great 
civilized nations. 

We have good investments to offer. We have a new 
country with great natural resources. We want the confi- 
dence of people all over the world — want their brains and 
enterprise and money to aid in developing these resources. 



lo DOLLARS, OR WHAT ? 

We have now, in a measure, lost that confidence, and can 
obtain it again only by manifesting the clearest purpose oi 
future integrity in our national finances. If we lend an eai 
to the delusive harangues of the free silver advocate, it is 
hopelessly gone from us. 

We of *the South in particular are vitally concerned in a 
financial policy that will insure the confidence of everybody. 
We have the Hchest undeveloped section of the country. 
The eyes of investors everywhere are turned toward us. 
Give the country safe financial legislation and within ten 
years the idle accumulation of money of the East and of 
other countries would come to us by the hundreds of mil- 
lions. But give us free coinage of silver and we shall invite 
the ridicule and contempt of the civilized world. We should 
take a backward step of half a century in our industrial 
growth. Under such condition there would be no hope at 
all for the present generation in the South. The East, with 
its generations of savings and large accumulations, might, in 
a way, survive such a calamity, largely, too, at our cost ; but 
we should flounder in poverty. 

Without regard to political ties or associations, let us of the 
vSouth, aye, and of the North, and the East, rise and stand 
together against this proposed and monstrous blunder. I^et 
us make it clear that no man, of any party, can have our 
votes unless he squarely defines himself for honest money 
and honest financial legislation. 




DIVISIONS OF SENTIMENT. 

Bimetallism means the use of both gold and silver as 
money. It does not necessarily mean a double standard, 
which is an impossibility, unless an equal intrinsic market- 
able value of metal is put in each kind of dollar. That is, 
loo cents' worth of marketable gold in the gold dollar and 
loo cents' worth of marketable silver in the silver dollar. 
This would make a double standard, but to remain so there 
must be no fluctuation in the market value of either metal. 

The use of gold alone as a money metal is gold monomet- 
allism. 



Ji 



DOI^IvARvS, OR WHAT? ii 

The use of silver alone is silver monometallism. 

The silver mining states of the West want and have long 
been striving for silver monometallism. 

The remainder of the free silver people want bimetallism. 

The distinction is vital, but not generally understood, or 
recognized. 

There is really wider difference of real sentiment between 
the mining camps of the West and the silver people of other 
sections than there is between the latter and the sound 
money men. 

Silver men east of the Mississippi have no interest in the 
silver product as an industry ,"and only desire to promote its 
wider use as money; but generally, unlike their Western 
allies, they would oppose its use to the exclusion of gold and 
the great consequent reduction in the volume of our currency. 

They have a mistaken theory that gold and silver can both 
become standards of money on a basis of i6 to i, and it is 
that theory for which they are earnestly fighting, in the 
honest but erroneous belief that it would work in practice 
and restore old time prosperity. It is simply a theory, be- 
cause it is an idea or scheme that has never been put to the 
test. There is no record in history that any nation has at- 
tempted to make standards of two metals at a ratio of greatly 
differing values. 

The silver people assert that free coinage would raise the 
value of silver to that of gold on a basis of i6 to i, but that 
is also a mere theory, with everything against it and nothing 
in favor of it, excepting the bare assertion, and that, like the 
other, is a most dangerous theory in view of the calamities 
its test would precipitate. 

The sound money men oppose both these theories, and 
also oppose the scheme of the Western silverites to put the 
country on a silver basis, with silver as the only metallic 
currency. They are not gold monometallists, as is often 
charged. There is no public sentiment favoring gold mono- 
metallism in this country. They are bimetallists, differing 
from the free coinage bimetallists in that they favor our 
present gold standard of value, and desire to keep all the 
silver that can be safely used, and all the paper circulation as 
good as gold, on which both are based. 

Unlike the free coinage bimetallists, they advocate no 
theories. They adhere to precedents and tried principles. 
They believe that the experiences and practical financial tests 




12 DOLLARS, OR WHAT? 

of Other nations, at the present day and in former perioTTs 
arc a safe guide. They have the record of a thousand years 
of financiering, and find no instance where a bold and gen- 
erally distrusted financial theory, put to a practical test, has 
has not wrought disaster. Although they greatly admire the 
genius of young America, and are partial to some of her 
statesmen, they are unwilling to follow the lead of men who 
would make such radical departure from all known and tried 
methods of financiering. 

The writer believes this to be a true and candid statement 
of three important divisions of sentiment on the financial 
question. 

Is the reader a bimetallist of the theoretical school? Is he 
a bimetallist of the practical school ? Or is he a silver mono- 
metallist of the school of the mining camps? 

If he is a bimetallist of the theoretical school, there is great 
hope that he may join the practical school. It is assumed 
that he is a sensible, right thinking man, earnest in right 
purposes, really afraid of mere theories ; and if he will take 
the pains to investigate this important matter he can ascertain 
that his present views ARE theoretical to the extent that 
they have never been tried by ANY nation that history makes 
mention of. x 

If, however, he belongs to the school of the mining camps, 
there is little hope of him. They have silver to sell out 
there, and the only lessons taught are how to sell it. This is 
a selfish doctrine, and the man who embraces it is hard to 
reach. There are a few politicians east of the Mississippi 
who belong to this school, but they have outlived their day 
and usefulness. 



: 



THE GOVERNMENT STAMP ON MONEY. 

It is a popular error of free coinage people, and other ad- 
vocates of fiat money, that the stamp of the government 
makes money perfectly good. This false idea is at the bot- 
tom of most inflation theories. 

The United States, or any other government, might stamp 
a dollar mark on a paper bill and it would not pass for 5 
cents, nor for i cent, if the bill were drawn without any 



DOLLARS, OR WHAT ? 13 

promise to pay. This is a simple fact, not at all understood 
by many intelligent people. 

There must be a promise of final redemption, acceptance 
for customs, or other substantial promise to pay, and its 
value, as money, depends entirely on the kind of payment 
promised, and on the solvency and ability of the government 
or institution issuing the bill. In Mexico, or any other 
country on a silver basis, the promise to pay would be in 
silver, and the bill, therefore, granting the solvency and 
promptness of the maker, would be worth a Mexican silver 
dollar, about fifty cents of our money. 

In the United States the promise to pay on such a bill 
means payment in gold, because the United States maintains 
a supply of gold for the special purpose of paying any of 
these bills that may be presented. 

Another mistaken idea of many uninformed people is that 
the government issues these bills, and that they pass from 
hand to hand indefinitely, and nobody ever asks to have them 
redeemed. 

The fact is that the government is often called on for the 
redemption of its bills. This has been made quite clear and 
become pretty generally understood during the past two 
years. Business men require gold for commercial purposes, 
and when it suits their convenience they exchange their 
paper money for it. But if such exchange seldom, or never, 
actually occurred, the fact that it could at any time be made 
would make the payer money as good as gold. 

A man may have $100 to his credit in bank, and let it re- 
main there year after year, because he does not need it, and 
believes if he should need it he could go to the bank and get 
it. 

Under our system the government represents the bank, 
and the holder of any bill, or piece of money other than 
gold, represents the depositor, and the bill or money he holds 
is a certificate of deposit. As long as he can go to the gov- 
ernment bank and get this certificate cashed, he is satisfied 
to hold it ; or the man he owes, or deals with, willingly ac- 
cepts it. In other words, if the government clearly shows 
its purpose of maintaining, and its ability to maintain, its 
gold reserve for redemption purposes, no large volume of 
paper, or fiat money, is presented for redemption. But if the 
government wavers in that purpose, or if it puts in circula- 
tion too many promises to pay, either in paper dollars or in 



14 DOIylvARS, OR WHAT ? 

silver dollars — if it thus increases its demand obligations out 
of proportion to the gold redemption reserve, then people 
lose confidence in the intrinsic value of its dollar marks on 
paper and silver, and large amounts of the money are taken 
to the Treasury and exchanged for gold, as was the case after 
the passage of the Sherman law, and notably in 1893. 

During the ten years preceding the passage of the Sher- 
man act the total withdrawals of gold from the Treasury, in 
exchange for paper money, were less than twenty millions 
of dollars ; but during the four years the Sherman law was in 
force these withdrawals of gold exceeded two hundred and 
sixty millions of dollars. Had that law not been repealed 
in 1893, there would not have been a dollar of gold in the 
Treasury within six months, and there would soon have been 
none in the countr3^ We should have wholly lost more than 
one-third of the money in circulation, and the remaining 
two-thirds would have been on a silver basis, possessing only «— 
one-half its former purchasing value. SI 

The United States has no more immunity from distrust, 
if it manages its finances badly, than an individual or a cor- 
porate institution. If conducted on unsound principles, its 
treasury is as liable to a run as a bank. If people have paper 
bills with dollar marks on them, for which they can get gold 
to-day but may not be able to get it to-morrow, they are apt 
\o make liie * ex^change to-day. If they have silver pieces 
worth really onl>>?' 50 cents, but which, by reason of the gov- 
ernment stamp, avud promise, they can now convert into 
crold, but may not bt<^ able to do so to-morrow or next week, 
they are likely to conV>^'^rt it now. And it is not bankers only 
who make the exchangee. 

There are to-day tena^; of millions of gold hoarded in the 
stockings of the free silv^-^r coinage advocates of the United 
States. The writer knowls a man in his own city, prominent 
in public life and a protiounced free coinage man, who in 
1893 promptly converted his bank account into gold and 
locked it up. He knows j scores of other strong free silver 
men who did the same thi|ng. 

In practice these people; appear to know the difference be- 
tween a dollar mark and a real dollar — between a gold basis 
and a silver basis; but in theory the "money of the consti- 
tution " is good enough for anybody, and a gold standard is 
'infamous. 



I 



J 



DOIyl^ARS, OR WHAT ? 



DIFFERENCE BETWEEN DEMAND AND TIME 
OBLIGATIONS. 

Persons who do not reason, and have given small attention 
to business principles and financial matters, do not recognize 
the difference between demand and time obligations, particu- 
larly as applied to governmental affairs. 

They know that the United States is a great and rich 
country, and that it is abundantly able to pay all its debts. 
They reason that such a great country, with such unlimited 
resources, can put out unlimited quantities of paper, or de- 
preciated silver, and circulate them at full face value as 
money. But, as stated elsewhere, such money must be 
promises to pay ; and to make the promise good the govern- 
ment must be ready to pay. It must be ready to pay on 
demand. If not, the promise means nothing. Its promise 
to pay must be in somethmg of intrinsic value. Gold, if on 
a gold basis, and silver if on a silver basis, and this redemp- 
tion money must be in hand and in sight. It must be in 
good proportion to the money it puts in circulation. If it is 
not, nobody has confidence in the money. But the ability 
of any government to accumulate and carry a stock of coin 
for such purpose is limited, and consequently its circulation 
of money must be limited in proportion. 

Time obligations are less directly limited. These are 
based on the resources and wealth of the country; on its 
revenue, or possible revenue. They may be paid . at matur- 
ity, or funded and extended indefinitely. They bear interest, 
and can be floated as long as there is no decline in the 
resources of the country. 

Demand obligations, in the form of money, bear no inter- 
est, and are therefore of uncertain value, whether issued by 
a government or by an authorized corporation, unless good 
on demand. 

The United States can float its lo, 20 or 30-year interest- 
bearing bonds in very large sums, without injury to its 
credit, but floating money, payable on demand, and on 
which payment is being constantly demanded, is quite a 
different thing. 

The distinction is vital. There would be less clamor for 
-fiat money if it were generally better understood. 



16 DOLLARS, OR WHAT ? 

An individual with good resourses may put out $io,< 
of his interest-bearing time notes and carry such indebted- 
ness for y^ars. 

Before they mature he prudently arranges for renewals, 
or places them elsewhere. If these obligations were payable 
on demand they would be a constant menace, liable to bank- 
rupt him at any time. 

Fundamental principles of business and finance are inex- 
orable, and apply relentlessly alike to men or nations. 

Any scheme to issue large amounts of fiat money is wholly 
chimerical. Wherever undertaken the result has been fail- 
ure and bankruptcy. No people can grow rich on promises 
to pay that cannot be made good. 



A DOUBLE MONETARY STANDARD. 

The only way a double standard of money can be main 
tained is to put the same commercial value of metal in the 
coin of each standard. If an actual dollar's worth of silver 
be put in the silver dollar, and a dollar's worth of gold in 
the gold dollar, then the gold dollar and the silver dollar will 
both become standards. Commercial laws will make them 
such without any reference to legislation. Commercial law 
is superior to legislation in the fixing of values. 

It is a wholly mistaken and visionary theory that legisla- 
tion (either by one government or by all the governments in 
the world) can make a double standard of money, or of any- 
thing else. Is it reasonable to suppose that the United 
States and all Europe combined could pass laws that would 
make the prices of wheat and corn the same in the world's 
markets? And yet the prices of these commodities can as 
easily be regulated as the values of gold and silver. If 50 
cents or 75 cents, or even 99 cents' worth of silver be put 
into the silver dollar, and both the gold dollar and the silver 
dollar are made a legal tender (without a gold redemption 
feature), it ought to be easy enough to see that people would 
use the cheaper dollar, and either sell or hoard the dollar of 
intrinsic value. The silver dollar would be as good as the 
gold dollar to pay debts with, but the gold dollar would sell 



ii 



DOLI.ARS, OR WHAT ? 17 

in the market by weight for a premium. Therefore, the gold 
would go out of circulation. It is simply impossible to keep 
two moneys of different intrinsic values both in circulation, 
unless the cheaper money is made redeemable in the more 
valuable money. 

And an unlimited amount of cheap money cannot be re- 
deemable in good money. 

Up to twenty years ago the ratio of value between the two 
metals had been for about two centuries between i^}4 and 
16 of silver to one of gold. Running thus evenly it was not 
impossible to have a double money standard, and such stand- 
ard did exist in many countries. 

But at times one metal or the other increased or decreased 
in value and at such times the more valuable in every in- 
stance went out of circulation. 

This is the record of history, and many instances may be 
cited. It is only within comparatively recent years that any 
country conceived the plan of making the cheaper metal 
redeemable in or interchangeable with the more valuable 
metal. And when silver began to be so abundant, and to 
decline so greatly, all countries, excepting the United States, 
abandoned or greatly modified that plan. 



INCONSISTENCY OF FREE COINAGE ADVOCATES. 

The worst inconsistency of the advocate of free coinage is 
the ratio at which he insists silver must be coined. He 
wants it coined at 16 to i. That is, he would put 16 times 
as much weight to a silver dollar as is put in a gold dollar. 
On this basis, before either piece of metal is converted into 
stamped money, the piece of gold would sell in any market 
in the world for 100 cents, whereas the piece of silver would 
bring but little over 50 cents. 

It is clear that the silver 50 cent piece must be made by 
law interchangeable with and practically redeemable by the 
government in the full value gold dollar; otherwise the two 
dollars would not circulate side by side. Yet this silver 
theorist rails at the government for keeping a gold reserve 
to make this 50-cent silver money pass for 100 cents. 



i8 DOIvIvARS, OR WHAT? 

If silver advocates want to coin all the silver in the world 
why do they not propose to put loo cents' worth of silver 
into the silver dollar? It would then stand alone, and until 
silver declined they could, without disturbance, give the 
metal the "wide use" to which they claim it is entitled. 

The writer does not believe in nor advocate the practica- 
bility of this policy, but speaks from the silver standpoint. 
And such policy would be more honest, and somewhat less 
dangerous than the plan proposed, though it would doubtless 
soon result in the disasters of the Sherman law. 

In former ages and periods silver was in great request as 
a money medium, because the supply was very limited. But 
modern discoveries, appliances and inventions have so in- 
creased and cheapened the product that it is fast ceasing to 
be of value as a money metal. While in former ages it was 
turned out by the pound, it is now turned out by the ton 
and by the ship load. At one period of the world copper 
was used as money, and would doubtless have continued in 
use to the present day but for the fact that it became so 
abundant that it ceased to be a precious metal. 

It is not easy for people now to accept the idea that silver 
may for the same reason eventually cease to be useful for 
monetary purposes. That time has not yet, and may never ^ 
come, but it cannot be said to be a remote possibility. 

It is foolish to go on theorizing about the cause of its de- 
cline, and the methods that would raise its value, when it is 
becoming so abundant that warehouses, instead of strong 
boxes, must be provided for its storage. The commercial 
law of supply and demand regulates its price exactly as it ^^ 
regulates the price of every other known product, and it is.lK 
not within the power of all the legislative bodies in the world 
to permanently and materially raise or depress its value. 
Whether they all "demonetize " or " remonetize " makes in 
the long run small difference. The law of supply and de- ,^ 
mand has small respect for the edicts of legislative solons. .jM| 

Happily, however, for other nations, and for the general 
good of mankind, the United States is the only country on 
earth dominated by the mine operators of a few sparsely 
settled states. England, France and Germany may have a 
few visionaries, but their legislative bodies are not bullied 
by a powerful lobby of millionaires with train loads of silver 
for sale. 

All efforts looking to free coinage bimetallism by inter- 



I 






DOLLARS, OR WHAT? 19 

national agreement are wasted. The credits of Europe, 
amounting to thousands of millions of dollars, are based on a 
safe and permanent standard. Its disturbance would result 
in disaster and calamity, such as would shake to the founda- 
tions every throne and government on the continent. No 
step will be taken in the direction of such danger. And it 
is probable that even some of our free silver mine owning 
Senators are not quite so blind as to be unable to see the 
folly of expecting any move abroad in that direction. But 
they will clamor all the more for renewed and enlarged 
''recognition" at home, on a basis of 16 to i, for their be- 
loved metal. 



VOLUME OF MONEY NEEDED. 

Owing to the great number of banks, and the system of 
credits throughout the United States, we need less actual 
money per capita than is needed anywhere else in the world. 
There are few towns of five hundred population that have 
not a bank. Less than 5 per cent, of all payments are made 
in actual money. The bank check does the remainder. A 
gives his check to B ; the bank transfers A's credit to B's 
account, and B checks in favor of C, and so on through the 
alphabet. This system of ready credits does the work of a 
great volume of money. It is not merely a convenience, but 
it increases profits in prompt conversion and quick settle- 
ments. 

Our money per capita of about $24 is, under our banking 
system, equal to a per capita of $100 in many countries. We 
can make quicker turns and do more business on $1 actual 
money than can be done on $5 in a country that has few 
banks. 

The banking capital of the United States exceeds one- 
third of that of all the countries of Europe. It amounts to 
$1,400,000,000, against $3,500,000,000 in Europe. 

The proportion of bank deposits in favor of this country 
is much greater. These are, in round figures: The United 
States, $4,000,000,000; Europe, $6,500,000,000. 

It may be seen that we have about $60 per capita in 
deposits subject to call; and an immense volume of checks 



DOLLARS, OR WHAT? 



are in constant circnlation. The total clearing house ex- 
changes of the Uuited States in 1894 amounted to $45,615,- 
000,000.* ' This is an incredible sum, and these exchanges 
supply the place of a great volume of money. Considering 
the aid of this circulation, we have much more money per 
capita than any other country. France, with $36 actual 
money per capita, has only about $20 per capita in bank 
deposits. • 

Another advantage we have is in the great number of 
small banks, widely scattered, and a corresponding number 
of small deposits, a large per cent, of which are, in the form 
of the bank check, constantly on the wing ; and one must be 
a banker to know how much money people get the use of by 
sending checks all over the country before deposits are made 
to cover them. Many business firms constantly keep out 
thousands of dollars of checks with never a dollar of their 
own money in bank. They send these checks from Maine 
to California, making careful estimates as to how long it 
takes them to get round to the banks they are drawn on, and 
deposit money, or similar checks (the greater per cent, of de- 
posits being other checks), in time to make them good. The 
volume of such checks, drawn against blank bank balances, 
is immense, and this class of checks alone answers for a large 
circulating medium. 

We have an abundance of money in this country, if it were 
more evenly distributed as to sections. It unduly accumu- 
lates in the centers under our present currency system, and 
will continue to do so as long as the bulk of the money is issued 
directly by the government. 

The great need of the South and other sections remote 
from the centers, is a flexible bank note currency. Not an 
issue by banks of the wildcat order, but a currency as good 
as the national bank note, though more flexible than that 
now is, and adapted to the varying seasons and conditions. -^ 
The South has no interest in the Western silver, mines. It^J 
has nothing to gain by unloading the product on the govern- 
ment. And it should turn its attention to its own practical . 
needs, the most important of which is a safe bank note,™ 
currency. And particularly so since a part of that plan '^ 
would take the government out of the banking business, re- 
lieve the treasury of its disturbing embarrassments, and so | 

'•Monetary Systems of the World.— Muhleinan. 



DOIvIvARvS, OR WHAT? 21 

hasten good times that the Western miners would become a 
hopeless and a helpless minority.f 



ISSUING PAPER AGAINST SILVER. 

One of the theories of free silver advocates is that the 
government can buy silver at about 60 cents an ounce, and 
issue paper money — ^(generally called silver certificates) — 
against it on abasis of 16 to i of gold; which would make 
$1.00 of the silver certificate represent less than 60 cents, 
worth of silver held against it for its redemption. In other 
words, if the government should buy say $55 worth of silver, 
it would be required to issue and put into circulation $100 in 
silver certificates. (The exact cost of the silver would depend 
on the market price at the time of purchase.) The $55 worth 
of silver would be coined into one hundred silver dollars, and 
any holder of the certificates would be entitled to exchange 
them for the coined silver. This was in part the principle of 
the Sherman law. 

But as the writer has elsewhere clearly shown, the mere 
stamp of the government on paper gives it no value, unless 
there be a promise to pay, and to make the promise trusted, 
it must be a promise of full payment. 

Now these silver certificates put out under the Sherman 
law were made payable in silver dollars, and as silver de- 
clined, and these silver dollars declined in intrinsic market- 
able value till they were worth little more than fifty cents 
each, the silver certificates would have been worth just the 
same but for the fact that it was the policy of the govern- 
ment, regardless of the law, to keep all of its money on a 
parity. It was its policy to make its promise, as was origi- 
nally intended, fully good — to make all of its dollars redeem- 
able in 100 cents good money ; therefore, the government 
accepted the silver certificates and silver dollars as well, for 
all dues, made them interchangeable with and practically re- 
deemable in gold. Otherwise we should have had moneys 
of varying values. The silver and silver certificates would 
have been worth 55 or 60 cents, varying with the market 

tSee an article in this book, "Bank Note Circukition." 




22 DOLLARS, OR WHAT? 

value of silver, and other money actually based on 
would have been worth loo cents. 

So it may be seen that paper money cannot be issued 
against silver at a ratio of i6 to i, and be full face valuQ 
money, unless it be interchangeable with gold. And, as 
elsewhere clearly shown, the gold reserve is not strong enoug 
to carry any increased volume of money. 

Moreover the government has directly lost an.incredibl 
sum making such experiments. Since 1873, ^^ has bought 
for monetary purposes silver costing five hundred and nine 
million dollars. (See report, 1894, Bureau of the Mint.) The 
shrinkage in value from the average cost of $1.00 per fine 
ounce has been enormous. 

These experiments were forced on the government 
"compromises" by advocates of free silver coinage. 

The New York Times^ in a series of carefully prepared 
articles, based on actual statistics, lately showed that the 
losses to the government on fiat paper money and silver, have 
cost it more than two thousand millions of dollars. And the 
policy that prompted such money has cost the country more 
than five thousand millions of dollars. This estimate is far^ 
within the true loss. 

The financial policy of the Uniced States, dictated for 20 
years by the mining camps of the West, would have beggared 
and bankrupted both the government and the people, if the 
country had not been new, and the most resourceful o 
earth. 

Theorizing is well enough for dreamers, but in matters of 
business, common sense and well known principles are the^ 
only safe guides. 

Free silver politicians who want votes, and Western mine 
owners who want other people's money at any cost, (to the 
other people,) have a theory never tried under like conditions 
in any country in the world, and they would commit us to 
that theory in complete disregard of consequences. 



IS 

It " 

e 

e 



DOIvLARS, OR WHAT ? 23 

" DISCRIMINATION " AGAINST SILVER. 

I have before me the U. S. Treasurer's report for 1894, 
in which it is estimated that in June, 1878, there was in the 
country a total silver circulation of only $87,693,799. 

The free silver advocate claims that since 1873 there has 
been unrighteous and criminal " discrimination '' against 
silver. But what are the facts? Up to 1878, the entire 
coinage of the country for a century had given us a total 
accumulation of only about eighty-seven millions of dollars; 
but since 1878 the coinage has been so great that we have 
now an accumulation of six hundred and twenty-five millions 
of dollars. 

In other words, seventeen years ago we had about one- 
seventh as much silver money as we have to-day. Our stock 
has increased five hundred and thirty-eight millions in 
seventeen years. And by far the largest annual increase was 
in the years 1890-1893, when prices were fast declining. 

Does this look like discrimination ? Not only has there 
been this incredible increase, but the entire stock of silver 
dollars is made a full legal tender; and notwithstanding the 
fact that the intrinsic and marketable value of this mass of 
money has been for some time at a discount of nearly 50 per 
cent, from its face value, and its legal tender, or debt-paying 
value, it is made as good as any other money for all' practical 
purposes. This parity has been maintained at a cost to the 
country of tens of millions of dollars of gold, and also to the 
great disturbance of all business and commercial relations. 

The truth is, that all financial legislation for twenty years 
has tended directly to the vastly enlarged use of silver as 
money, increasing its use as shown, seven times in seventeen 
years. The effort has failed in so far as concerns its actual 
circulation as money, owing to the fact that people will 
handle but small quantities of it. They turn it into the 
banks, and the banks turn it into the treasury and get other 
money in exchange for it ; and there it lies idle and useless, 
serving only to disturb confidence in our financial system. 
As stated elsewhere, there are now only fifty-six million 
silver dollars actually in circulation, this being all the 
country appears willing to use. Then why should we want 
to coin any more silver? Why should we want free coinage 
or unlimited coinage? 



24 DOI.LARS, OR WHAT? 

Inasmuch as little more than one legal tender dollar in 
of the present stock of silver can actually be put into the 
channels of business, would it not be better to quit agitating 
its further coinage, and quit disturbing confidence in the 
basis of our financial system ? 

It is pertinent in this connection to suggest, that if the 
increased or decreased use of silver as money has anything 
to do with " prices," as the free coinage advocate claims, 
prices ought to have been going up at a rapid rate during,™, 
the past seventeen years. 'm 

The ingenious author of "Coin " has figured to a nicety " 
that the decline in wheat has been almost exactly the same 
as the decline of silver. 

From the same point of view, "prices" ought to react 
with the increased use of silver; and if wheat was worth, 
say, (for easy illustration) $i.oo per bushel in 1878, it ought 
now be worth $7.00 per bushel, since we now have seven 
times as much silver money as then. Coffee was worth 11 
cents per pound in 1878, and ought therefore now bring^ 
77 cents. ^ _ ■ 

All such figuring and reasoning are the foolish straining " 
of a foolish theory, and have no basis whatever in fact. 
And yet upon this idea rests almost the entire claim for 
unlimited coinage of silver. 



i 



"DEMONETIZATION" OF SILVER. 

" Demonetization " is a word used in this connection with 
much looseness, and is generally misunderstood. It is a 
favorite word with writers and speakers careless of what they 
say, or who intentionally deceive and misrepresent the facts. 
And many persons are led to believe that " demonetization" 
means an attempt to abandon the use of silver for monetary jj 
purposes. U 

All silver dollars now in circulation are a legal tender for 
the payment of all debts, public and private, and the govern- 
ment makes no discrimination whatever against silver 
money. All legislation has been directly in favor of the 
metal in the attempt to support it, and in consequence, the 
"discrimination" has really and seriously been against goldi 



i 



DOIvLARS, OR WHAT ? 25 

[The old Trade Dollar is not a legal tender, and for that 
reason went out of use. It is not supported by the govern- 
ment gold reserve, and consequently it cannot be exchanged 
for a gold dollar nor for a legal tender silver or paper dollar. 
It is, therefore, worth only about 50 cents, although it has 
the dollar stamp of the United States on its face. This is 
clear proof of what our silver money would be worth if 
it were not interchangeable with gold. The mere stamp of 
the United States, or of any other country, could not make 
it worth, in purchasing power, more than about 50 cents, its 
commercial value in weight.] 

The repeal of the Sherman law did not in any way affect 
the $625,000,000 of silver now in the treasury, and in circu- 
lation, unless, indeed, it strengthened its value and its 
position as good money. The "gold bugs" are not trying 
to destroy the use of this silver. On the contrary, all advo- 
cates of sound money want to continue it in safe quantities 
in use as good money. 

The government has merely quit making any more silver 
dollars. That is all the " demonetizing" that has been done. 
The silver we have is as good, as money, as it ever was, and 
will remain so, unless the free coinage people succeed in 
putting us on a free silver basis, in which event it would not 
be worth more than half its present value, if, indeed, it 
would eventually be worth that. 

And it would, for a time at least, be a good deal harder to 
get one of the cheap silver dollars under free coinage than it 
is to get a good silver dollar now, because all gold would go 
out of circulation, and we should have much less money than 
now, to say nothing of its greatly reduced purchasing power. 

There is absolutely no "demonetizing" of silver in the 
sense the word is understood by the mass of voters. , It is 
used merely to deceive and mislead. 



THE "APPRECIATION" OF GOLD. 

The free coinage people assert that gold has "appreciated" 
in value, and that its appreciation has depressed all other 
values. This, like very many other loose assertions from 



26 DOIvI/ARS, OR WHAT? 

this source, has no foundation in fact. On the contrary, gold 
is vastly more abundant, and more readily obtainable, than 
ever before in the world's history. Its production and cir- 
culation have increased within thirty-five years more than 
twenty times the ratio of the increase in the world's popula- 
tion. This estimate is based on actual statistics of produc- 
tion. 

About one-half the world's production of gold during the 
past 400 years has been produced within the last thirty-five 
years.* This fact, and the well known increase of gold as 
money. within the memory of comparatively young men, 
completely refute the claim that gold is and has been "ap- 
preciating." Things or commodities do not "appreciate" 
when they become more plentiful. 

Cotton has depreciated greatly in value because the crop 
has from year to year largely increased. Planters have at- 
tempted to secure a general agreement to reduce the acreage, 
believing that by so doing, and thus materially reducing the 
supply, they could "appreciate" its value and advance its 
price. The same general law must apply to gold. 

It would be hard to demonstrate just what relation the 
volume of stable money has on prices, since they often de- 
cline or advance without apparent reference to monetary 
conditions. Supply and demand are more important factors 
than the volume of money. But common sense teaches that 
no particular kind of money can "appreciate" in value when 
the supply is largely increased, as in the case of gold. 
Through its large production only, silver has depreciated. 
And men now living may possibly see a depreciation in gold 
from the same causes. 

With the present annual gold production, and the outlook 
for increased production, it is safe to say that the output for 
the next twenty years will equal • the total product for five 
hundred years preceding i860. 

The output in 1894 was about one hundred and seventy- 
five million dollars ; in 1895 it promises to reach two hundred 
millions. That is to say, the world will produce as much 
gold in 1895 as was produced in fifty years about the time 
America was discovered ; or to come to more recent years, 
double as much as was produced in the ten years 1821 to 
1830; nearly as much as was produced in the ten years 1831 
to 1840 ; one-half as much as was produced in the ten years 

* See tables of world's production in report of Director of the Mint. 



DOLLARS, OR WHAT? 27 

1841 to 1850; more than a third as much as was produced in 
five years from 187 1 to 1875; nearly as much as was pro- 
duced in five years from 1881 to 1885 ; and double as much, 
lacking a few millions, as was produced in 1887. Since 1887 
the production has been more remarkable than during any 
other period of the world's history. 

Recent gold discoveries in Africa, South America, Austra- 
lia, and other parts of the world, are many of them rich be- 
yond computation. We are in a gold era, such as our fathers, 
nor even we, ever dreamed of. 

Inasmuch as more than one-half the gold production for 
four hundred years has been within the memory of compara- 
tively young men, and inasmuch as that production is in a 
fair way to double before they become very old men, the talk 
about the "appreciation" of gold is very foolish ; so foolish, 
indeed, that it will not be indulged by well informed persons, 
unless for purposes of deception. There is the greatest 
abundance of gold m all channels of business in the great 
nations of Europe, and more than one-third of the money of 
the United States is gold, enough for all practical purposes 
if the free silver people should cease to threaten to drive it 
out with cheaper money. 



GOLD THE "MONEY OF THE PEOPLE." 

One of the theories of free coinage advocates is that silver 
should hold its place with gold as money because there is 
about the same amount in value of each in the world. But 
they overlook the fact that it cannot be made to circulate as 
money in considerable quantities. There is, in the United 
States, $9 in silver per capita. But excepting the fractional 
silver used for change, there is only about 80 cents per capita 
outside the Treasury vaults, and probably little more than 
half of that, say 50 cents per capita, is in active circulation. 
The people find it too heavy to carry about, so they use other 
money, and the silver all drifts back to the government stor- 
age vaults. The greater part of the gold of the country, 
however, has always been in circulation. It is used largely 
in the settlement of bank balances, and it is a favorite money 



28 DOLLARS, OR WHAT ? 

with tens of thousands of the common people who put by 
small savings. A few gold pieces may be carried in the vest 
pocket, or put in a secret place without attracting attention 
or the danger of discovery ; silver, more bulky and heavier, 
is less easily carried or concealed. Rarely is silver secreted 
if the holder has enough to exchange for a gold piece. Gold 
is really the "Money of the People," as is clearly evidenced 
by the fact that the people are now using about nine times 
as much gold as silver, silver change excepted, notwithstand- 
ing the fact that silver and gold exist in the country as money 
in about equal quantities. 

In November last (see page 42, Report Bureau of the Mint) 
there was $500,381,380 gold coin in the hands of the people. 
On the same date there was only $56,443,670 in silver dollars 
in the hands of the people. On the same date (see page 41, 
Report of Director of Mint) the stocks of the two metals i 
the country were : 



Gold $626,632,068 

Silver 625,335,551 



I 



The following table shows the amount of silver dollars in 
actual circulation each year since 1885. (See Mint Report 
for 1894, page 23): j| 

1886 $61,000,000 ^H 

1887 ; 62,000,000 

1888 59,000,000 

1889 60,000,000 

1890 65,000,000 

1891 ... 62,000,000 

1892 61,000,000 

1893 58,000,000 

1894 56,000,000 

Round figures are given. This includes the silver doll 
held by the banks, and handled by them at a loss. 

These statistics are significant, and might be studied 
advantage by " Coin," and others who preach free silver. 

The simple figures show that gold and not silver is th 
people's favorite money metal. 

On July ist, 1894, the National Banks, which are popula 
ly supposed to own all the gold in the country, held only 
$125,051,677 net gold coin, (see report Bureau of the Mint, 
page 40) and only $34,023,000 gold certificates. That is to 
say, that out of $626,000,000 gold in the country, the na 
tional banks held about one-fifth. 

It is a mistaken notion that there has ever been an; 



I 



DOLLARS, OR WHAT ? 29 

'* combination " among these banks to corner gold, and the 
simple figures make that fact plain without argument.. The 
figures also show clearly that it is the people themselves who 
own and control the bulk of the country's supply of that 
metal. And it is largely held in small sums by the common 
people. Gold is indeed the money of the masses, and if the 
people are given the simple truth, and get to understand the 
facts elsewhere stated, that it is the single purpose of a large 
element of the free silver party to drive gold out of the coun- 
try and leave only silver, they will turn a mighty cold shoul- 
der to the deceptive pleas of the free silver advocates. 

There is no doubt at all of the fixed and determined pur- 
pose of the Western mine owners, represented by tlieir 
partners in Congress, to force the country to the single silver 
standard, with silver as the only coin in use. Any man who 
has carefully followed their course for ten years, in and out 
of Congress, sees and understands this as clear as day. They 
are playing a desperate game for what they believe to be 
large personal gains. They have been an absolute unit in 
aim, purpose and organization, standing shoulder to shoulder 
in every emergency, subverting all other public questions 
and interests to their own single common purpose of making 
the Government the unlimited purchaser of the products of 
their mines. With an organization compact and intensely 
selfish and powerful, they have long practically held the 
balance of power in the Senate, kept the Government waver- 
ing between sound and unsound financiering, wholly pre- 
venting a safe, consistent policy. They have for years 
pursued their end with restless and untiring vigilance and 
tenacity, hanging up important measures and blocking the 
public business at every step. Their complete organization 
and defiant attitude has time and again cowed and demoral- 
ized both houses of Congress. They have misled many 
good, able and honest law-makers and very many good citi- 
zens. They have influenced in their favor whole sections of 
country that would be impoverished if they should succeed 
in driving out the real '' money of the people " and giving 
the people for money only such metal as they themselves 
have to sell. 

The people have no time to study finances, nor to set a 
watch upon these ingenious, scheming and greedy agitators 
to discover their motives and plans ; but they should be given 
the facts, plainly stated. 



30 DOLLARS, OR WHAT ? 

Several Western millionaires are now reported to be nego- 
tiating for one or more New York newspapers with which to 
inflnence people to vote additional millions into the pockets 
of the mine owners. These men care nothing abont the 
welfare of the people. They merely want to sell silver at 
high prices to the Government. 




THE GENERAL DECLINE IN PRICES. 

There has been a steady and persistent decline in p 
since 1865, and the alleged " demonetization " of silver in 
1873 neither checked nor hastened that decline. We emerged 
in 1865 from the greatest war in modern times. War is a 
great destroyer as well as a great consumer. During the 
war period the demand had greatly exceeded the supply in 
all lines. The sources of production had also been cut off, 
or reduced, and prices had gone skyward. Decline was in- 
evitable and immediately set in. Any one in the mercantile 
business during the period from 1865 to 1878 will remember 
distinctly the difficulty of selling at a profit any stock that 
lay a few months on the shelves. 

The tremendous march of modern progress began about 
this time to become a great factor in the reduction of prices. 
During the period since 1870 the forces of civilization have 
developed more power and progress than in five hundred 
years, or even a thousand years before that time. The great 
alleged '' crime" of " demonetization" in 1873 ^^^ ^^t create 
a ripple in the resistless sweep of modern ideas, invention, 
enterprise and development. Railroads have belted the 
earth, reaching thousands of miles into wonderfully rich and 
formerly unexplored regions, enlarging and cheapening be- 
yond computation the production of every cultivated thing 
that grows from the ground, and equalizing (with cheap 
transportation, which has grown cheaper every year) all 
supplies in all parts of the world. Ocean tonnage has also 
been largely increased and carrying rates largely reduced. 
Steam has supplanted the sail ; the six months' voyage of 
thirty-five years ago is now measured by days or weeks. 
Where capital was formerly tied up for weeks in an ocean 



DOIvIvARS, OR WHAT ? 31 

shipment, it is now released within a few days. Where sales 
and purchases were made through months of correspondence 
by letter^ the telegraph and cable now do the work in a few 
hours. The cost of doing a given volume of business is re- 
duced by 50 per cent. All of these things have contributed 
to the steady and swift reduction of prices. 

It should be needless to direct attention to the marvelous 
improvement and development in mechanical appliances 
within twenty-five years — a development probably exceeding 
that of all time from the days of Adam. The cheapening of 
all manufactured products has been in direct ratio to the in- 
crease and perfection of these appliances. And they have 
also greatly reduced the cost of growing and harvesting 
wheat, corn, cotton and other agricultural products. 

The unlimited coinage of silver could no more have stayed 
the effect of these forces than a bunch of straw would turn 
Niagara. They have simply developed new and strange 
conditions, whether for the good of mankind or the reverse 
remains yet an unsolved problem. But it would seem that 
in the end great good must come from the cheapening of the 
cost of all the necessities, comforts and luxuries of living. 
Labor problems, and many vexing questions and issues not 
now quite clear, must be adjusted. But silver has no place 
whatever in these adjustments. 

We have had a transformation since the " demonetization" 
of silver. We are living in a new age. And the free silver 
advocates have as yet been unable to comprehend or accept 
the conditions. They have eyes but do not see. They cling 
to the dead past, and live on a pleasing but foolish memory. 
Some of them are garrulous and miserable. Others are spite- 
ful and venomous, because they foolishly believe that the 
great marching procession has ''conspired" against them 
and against the idol they have so long cherished with single- 
ness of heart and pathetic devotion. They are mischievous, 
because some of them have filled high places. Many people 
are impressed with the tenacity of their devotion ; others are 
attracted by the noise they make. But they are as unsafe 
guides as an old man in his dotage with a host of imaginary 
wrongs. 



DOIvIvARS, OR WHAT? 



OLD TIME PRICES. 

Who has not heard his father or his grandfather talk about 
prices in the days when there were no railroads — when every 
neighborhood was a market unto itself, and the silver " dollar 
of the constitution" was good enough for anybody? 

How the dear old fellows like to talk of the good old days 
when farm hands got $60 a year and a potato patch thrown 
in for good count ; when corn sold at 20 cents a bushel, sheep 
at 50 cents a head, and fine beef cattle, sleek and fat, at $S 
and $10 each, average, for the "bunch" ; when a strapping 
young fellow, brimful of vim and high hope, thought himself 
in luck and the envy of his fellows if he got a place in the 
village store at $75 a year and "found" himself; when the 
smart lusty "chap" went to serve at a trade at $20 a year, a 
few coarse clothes, and a cot in the garret "to boot." Not 
many years ago the writer was wont to smoke a cigar after 
supper with a fine old gentleman who never tired in the re- 
cital of incidents of those days of good will and good cheer. 
And how he loved to dwell on the time when he entered the 
biggest store in his part of the state at $100 a year, being re- 
warded for faithful service with an additional $50 when 
Christmas came. Ah, those were piping times of peace and 
plenty! There were no "gold bugs" then. Th^e were no 
national banks, with hated privileges. Anybody who could 
start a printing press could go into banking and issue money. 
True, the money had to be pretty well sorted before the old 
fellows started on a journey, and they were never quite sure 
it would be good when their destination was reached, but 
such inconveniences were good-naturedly accepted. There 
were no "conspirators" then to vex Uncle Sam and other 
honest folks. There was no "contraction" of the currency. 
The few millions of gold and silver were so widely and 
sparsely scattered that the most wicked ingenuity could get 
but little of it together; and as to the paper, the "bankers" 
who put it out, it being their own product, were never in a 
hurry to get it back ; and so great indeed was their reluctance 
to call it, that much of it is out to this good day. 

The great "crime" of the age had not then been commit- 
ted. Silver had not then been "demonetized." And I have 
sometimes thought what a happy circumstance it would have 
been if some of the "friends" of silver had lived at that time, 



DOLLARS, OR WHAT ? 33 

when nobody had ever thought of discriminating" against 
their cherished metal. But the prices then would have been 
harrowing to their souls, free coinage and silver at a premium 
considered. "Prices" are a great worry to the "friends" of 
silver, as, indeed, they are to all the rest of us. Even corn 
at 45 cents a bushel and labor at 90 cents a day, with " de- 
monetized" silver, vexes them beyond measure ; and it would 
not be safe to say what might have been the effect on Peffer, 
Stewart and Bland, for instance, if they had seen free silver, 
with farm wages $5 per month and corn 20 cents a bushel. 
But the writer trusts he may be pardoned the wish, which 
ought not to be an unkind one, that these three, and a few 
others, had indeed been of that generation. Possibly some 
of them were living in those days ; but if so, free and high 
price silver and corn at 20 cents must have cost them many 
serious and painful reflections, which, h®wever, they have 
doubtless forgotten. Silver at 16 to i was more valuable 
than gold (there being mined then several thousand million 
dollars less than now), but there were no sky-scraping pric«s 
of farm products, which is a curious circumstance, from the 
Stewart-Peffer point of view. 



SILVER AND WHEAT. 

The world's production of wheat has grown from two 
thousand four hundred and thirty-three million bushels in 
1 89 1 to two thousand six hundred and forty- five million 
bushels in 1894. This is a gain in supply of two bundred and 
twelve million bushels. But a more significant fact, and one 
of greater concern to American agriculturists, is that the 
wheat exporting countries of South America and Russia 
have in this period gained two hundred and fifty-six million 
bushels in wheat production. That is to say, in 1894 Russia 
and South America had two hundred and fifty-six million 
bushels more wheat to sell in competition with the wheat of 
the United States than they had in 1891. And a matter of 
still greater significance and concern is that the large export 
surplus of fifty million bushels of the Argentine Republic 
last year was produced at a cost estimated not to exceed 



34 DOLIvARS, OR WHAT? 

thirty-four to thirty-seven cents per bushel laid down at the 
seaboard shipping point.* Considering these facts, and the 
enormous crop harvested in the United States in 1894, is it 
necessary for the American farmer to puzzle his brain for an 
explanation of the low price of wheat ? Is silver somehow 
at the bottom of it, as is foolishly stated in " Coin^s Financial 
School," or is it a tremendous overproduction and a com- 
pletely glutted market? Is it the "crime" against the prod- 
uct of the Western silver mines, represented by Stewart, 
Peffer and associates, or is it the result of the opening up 
and cultivation of vast new tracts of the Lord's bountiful 
earth ? 

There was more coined silver and more idle money of all 
kinds in the United States in 1894, when wheat touched its 
lowest price, than ever before. The New York Times, of 
March 25, 1895, from which the statistics are taken, com- 
menting on the effect of overproduction on prices, says : 

**The natural effect of such increase, in exporting coun- 
tries, on prices, can easily be seen. It may be noted, also, 
that Russia has an export surplus of 192,000,000 bushels of 
rye, against 70,000,000 bushels a year ago." 

This item of 122,000,000 bushels increased surplus of a 
cereal largely substituted for wheat in many countries has 
been an important factor in determining prices. 

The depression of business and the blocking of all kinds 
of enterprise on account of silver agitation has also contrib- 
uted something toward depressing wheat. People cannot buy 
bread freely unless they have work. Capital, too, has been 
timid of investment in wheat, as in everything else ; and the 
withdrawal of this sustaining influence has been an impor- 
tant factor in the sagging of prices of all commodities. 



SILVER AND COFFEE. 



Reversing the order of wheat and cotton, coffee has ad- 
vanced gradually and enormously during the past ten years. 

The writer, being at the time in the wholesale grocery 
business, remembers that about 1885 he bought coffee in New 

* Estimates by the New York Times. 



DOLLARS, OR WHAT? 35 

York at about 7 cents per pound for fair grades. It is now 
worth 18 cents per pound. 

Silver was worth $1.06 per ounce in 1885. It is worth a 
little over 60 cents per ounce now. If the price of silver 
regulates the prices of other things, why has coffee gone up 
nearly 300 per cent, in ten years and silver gone down nearly 
50 per cent? 

The explanation is simple, and is the simple explanation 
that applies to the rise and fall of wheat, corn, cotton and all 
other products, whether of the mine, the mill or the farm. 

The production and supply of coffee in 1885 was excessive. 
More coffee was produced than the world could well consume. 
High prices in former years had greatly stimulated its pro- 
duction, and an undue number of people went into coffee 
growing. The increasing supply overstocked the markets, 
and prices gradually declined. 

And when they got so low that coffee production became 
unprofitable, the industry was abandoned by many producers. 
The supply was gradually reduced, and stimulated by short 
crops, coflfee went up. Another period of low prices in coffee, 
brought about from the same causes, is likely after a time to 
set in. 

The decline or the advance in the price of silver has no 
more influence on the marketable value or prices of things 
than the remotest star in heaven on the tides of the ocean. 



SILVER, WHEAT AND COFFEE. 

Brazil produces a large per cent, of the coffee grown. The 
Argentine Republic produces a large amount of wheat. 

Now in Brazil coffee has advanced in ten years from say 
6 cents per pound to say 16 or 17 cents per pound on the 
Brazilian seaboard. 

But note the contrary course of wheat in the Argentine 
Republic. In 1885 the cost of wheat in that country ex- 
ceeded $1.50 per bushel. It is now about 40 cents. The 
greater part of the crop of 1894 was sold by Argentine 
farmers at about 38 cents.* 
*Estimates made on gold values. 



36 DOIvLARS, OR WHAT? 

In other words, the wheat product of Argentina, and of the 
world, gradually grew till it exceeded the demand, while, on 
the contrary, the supply of coffee in Brazil and other coffee 
countries grew less till the demand exceeded the supply. 

Silver had nothing whatever to do with the rise or the fall 
of either. 



SILVER AND COTTON. 




For the five years, 1 890-1 894, inclusive, the total produc- 
tion of cotton in the United States was, in round figures, 
44,000,000 bales. For the previous five years it was a little 
above 34,000,000 bales. That is to say, in the years 1890 to 
1894 we grew nearly 10,000,000 bales more cotton than in 
the preceding five-year period. The production also increaseJBjl 
in other countries. =™* 

With such tremendous gain in supply, with an actual and 
substantial falling off in consumption during part of this 
period (the falling oflf amounting to about 500,000 bales in 
1893), 5^eed we look up the market price of silver to account 
for the price of cotton? 

If the world grows more cotton than it can sell to the 
spinners and other manufacturers, what is to be done with 
the surplus? People cannot eat it, build houses of it, or 
otherwise use it. Somebody must hold it; put money into 
it ; pay interest, storage and insurance ; give it time and at- 
tention. The contingencies of future consumption and sup- 
ply must be taken account of. The surplus becomes purely 
speculative, at greatly reduced value. And it brings down 
tke price of the entire supply. With a large surplus on hand, 
and a production of ten million bales per year in the United 
States (an excess of two million bales per annum above 
legitimate demands from this country), with no certainty, or 
even reasonable probability, of decreased production, can 
aaybody fail to see why cotton is lower than ever before ? 
The State of Texas alone grew last year half as much cotton 
as was grown in the entire South ten years ago ; and the pro- 
duction in that state can be largely increased at a profit, even 
at present prices. 

If silver were 30 cents, 75 cents, $1.00 or $2.00 per ounce, 



DOLLAkS, OR WHAT? jt 

would the present large surplus of cotton and the overpro- 
duction in the United States of two millon bales per annum 
disappear? It would if the decline in silver has been the 
cause of the decline in cotton, as the fertile anther of ''Coin," 
and other visionaries have figured ; but a practical man would 
say that the crops must be reduced two million bales, or new 
uses must be found to consume two ' million bales more than 
the world now consumes, if the old standard of prices are 
again to prevail. 



SILVER IN FRANCE. 

Free coinage orators point to France as a country that has 
done wonders with silver. But when silver began to decline, 
and its coinage ratio to go below the gold value, France closed 
her mints to silver. 

A recent statement of the Bank of France* showed specie 
holdings as follows: 

Gold .$430,000,000 

Silver 225,000,000 

Showing $205,000,000 more gold than silver. 
The November statement of the United States Treasury 
showed specie holdings : 

Silver .$508,000,000 

Gold 126,000,000 

Showing $382,000,000 more silver than gold. 

So it appears that the Bank of France held nearly $2 in 
gold to every dollar in silver, while the United States Treas- 
ury held only $1 in gold to every $4 in silver. 

The Bank of France, on the date referred to, held nearly 
double as much gold as the Bank of England ; and France 
is as firmly a gold standard country as England, and will 
always remain so. And it was wise enough to stop the 
coinage of silver before it endangered its gold supply. 
There is no free coinage party in France, nor, indeed, in 
any other great civilized country, excepting the United States. 

France has a total of $825,000,000 of gold and $492,000,000 
of silver, nearly double as much gold as silver, while the 
United States has almost equal quantities of «ach. 

*See 1894 Report of the Director of the Mint. 




38 DOLLARS, OR WHAT ? 

FREE COINAGE IN MEXICO. 

Our next door neighbor, Mexico, has produced more silver 
than any other country in the world. The mines of Chihua- 
hua alone have produced more than five hundred million 
dollars. Sonora, Zacetecas and others have yielded even 
more. Coinage is free in Mexico. And yet the people are 
poor beyond the conception of the common American laborer. 
All labor is poorly paid. The writer spent some time in 
Mexico some years ago, and made particular inquiry as to 
wages paid in agriculture and mining, the principal indus- 
tries of the country, and found them varying from lo to 36 
cents per day, which is equivalent to 5 to 18 cents in Ameri- 
can money. 

The average for the farm laborer did not exceed 20 cents 
per day, or about ten cents in our money. The people live 
in huts, subsist on the coarsest food, and $2 in American ^ 
money would buy the average outfit, from head to foot, iiiJH] 
clothing. ^^™' 

This is the condition in a free coinage country that has 
produced more than four thousand million dollars of silver, 
and which is still producing silver at a larger ratio per capita 
than any other country in the world, its exports of the metal 
in 1893 being $5i,ooo,(X)0, and in 1892, $49,000,000. I have 
not the statistics for 1894. Mexico has a population of 
12,000,000. If the United States produced silver in the 
same proportion or the same rate per capita, counting 
Mexico's exports only, our production would be $300,000,000 
annually, yet who would say that the people of that country . 
are better off than we? 

Mexico has a money circulation of $4.71 per capita. 

A low rate per capita exists in nearly, if not quite all, 
silver countries. 

The people who advocate free coinage in the United 
States claim that low prices and depressed trade conditions 
are due to our gold standard, and insist that free coinage 
would bring an era of prosperity. If any of them will move 
across the border into Mexico their opinions will undergo 
a decided change. A move merely to the border would 
have a wholesome etfect. 

On the Mexican side there is small progress and unfavor- 
able conditions generally, while within the United States 



DOLIyARS, OR WHAT ? 39 

line there is activity, growth and fair prosperity. All the 
cities and villages near the line are built and are building on 
the American side. 

Free silver coinage can make no country prosperous; on 
the contrary, the mere apprehension of it is quite sufficient 
to depress business and arrest enterprise in any enlightened, 
prosperous nation. 



TRAIN LOADS OF SILVER. 

"Coin," with a stick twenty-two feet long, deftly measures 
oflf a space which he says would hold all the gold in the 
world; which, it may be said, is the strongest argument he 
could have made in favor of gold as money. 

He then neatly disposes of the world's silver money by 
saying that it could be stored in a Chicago banking room and 
basement. 

His idea is original, but he does not put it in a way that 
his pupils quite grasp the enormity of the pile. It would 
be a little more understandable if he had said that there is 
enough coined silver to load fairly well three hundred trains 
of twenty cars each, or a total of six thousand car loads. 
He might have explained further that there are eight hun- 
dred and forty-four car loads of silver held for monetary pur- 
poses in the United States; and also explained that it is 
impossible to keep more than seventy-six car loads of that 
outside of the Treasury, of which probably forty or forty- 
five car loads are stored in bank vaults ; showing that thirty 
or forty car loads are as much as the people are willing to 
carry obout in their pockets and secrete in their homes. 

The United States produced in the single year 1893, ^^^ 
hundred and four car loads of silver, almost three times as 
much as the people will carry about with them, and more 
than twice as much, excepting silver change, as can be kept 
in circulation outside the Treasury. 

In 1893 the world produced two hundred and eighty- two 
car loads of silver. , The production had since 1874 increased 
in every year, excepting one ; and would have continued to 
increase more rapidly but for the fact that it began to decline 




40 DOLLARS, OR WHAT? 

in price because it became so abundant it could not be 
utilized either as money, or in the arts. 

Owing to the improved methods of mining within very 
recent years, and discoveries of new mines and mining 
regions in different parts of the world, it is perfectly safe to 
say that if silver had remained at even the greatly depre- 
ciated price of $i.oo per ounce, not less than $300,000,000, 
or say four hundred and five car loads, would have been 
mined in the year 1895 — about ten times as much as the 
people of the United States keep in active use. 

At this rate of production, 22,500 car loads would be 
turned out in an ordinary lifetime. All the locomotives on 
the largest system of railroads in the world could hardly 
haul it. 

And the capacity of production is unlimited. If its value 
could be raised even to 84 cents an ounce, its price in 1893, 
its output would now far exceed the two hundred and eighty- 
two car loads mined in that year. But in the face of unlim- 
ited quantities in sight, and unlimited resources for getting 
it out of the mines, no great or permanent rise in its price is 
possible. And under such conditions its constant fluctua- 
tion in value i* inevitable. If the price is so low that little 
is mined, it will go up ; if it advances enough to show a 
profit, enterprise and capital will at once increase the output, 
and it will go down. The output is limited by the price only. 

The principle is the same as in pork production. If hogs 
are high, farmers everywhere go to raising them ; and soon 
glut the market Then the price of pork declines till hog 
raising becomes unprofitable ; and the farmer tries his hand 
at liomething else. 

Does anybody want a currency based on such a metal, 
a currency that a lot of miners put up or down as their 
interests prompt? To-day you have Dollars, to-moriow you 
have — Wnat? 



DOLLARS, OR WHAT ? 



GOLD AND SILVER PRODUCTION. 

The world's total stock of metallic money is approximately 
$8,600,000,000, the proportion of gold and silver being not 
far from equal, there being about one- tenth more of the latter; 
say $4,100,000,000 gold and $4,500,000,000 silver. 

This is the total money accumulation of these metals from 
the date of their use to the present time. 

And it is interesting to note that the world's production 
of the money metals within the last thirty-five years has been 
approximately $7,300,000,000, of which about $3,950,000,000 
was gold and $3,350,000,000 silver. 

Much more gold than silver was consumed in the arts ; 
and several hundred millions more silver than gold was, in 
that period, available for coinage into money. 

This immense increased supply of the precious metals 
became the property of a few countries, since it was through 
the agencies of the progressive, civilized nations only that it 
was produced. 

The gold was readily absorbed, owing to its great value in 
sm^U compass ; but these enterprising countries suddenly 
accumulated more silver than they could use as money. For 
instance, the silver of Mexico is mined largely by Americans 
and Englishmen, and its large output goes mainly to Eng- 
land and the United States. This is the simple reason why 
certain countries limited the coinage of silver. It is the 
reason why there can not be free coinage without involving 
these countries in hopeless bankruptcy. 

In former periods the supply of the metal was limited, and 
the people had no more than they could handle and carry 
about, but the largely increased stock could not be circulated. 

It is shown elsewhere that only about 80 cents of silver 
per capita can be actually circulated in the United States, 
and the same conditions exist in all other countries where a 
lighter and more convenient currency is available. 

Its '* demonetization" by any country was not from choice, 
but from necessity. It was not done because any particular 
class of men or legislative body wanted it done, but because 
the people, in effect, said to the law makers : 

*'You are giving us too much of this kind of money ; it is 
too bulky and heavy ; ten or twenty dollars weights the 
pocket ; we cannot hide it ; when we have money we do not 



42 DOIvtARS, OR WHAT? 



"% 



want everybody to know it ; you can coin it if you want to, 
but if you do so, you must keep it ; if you give it to us we 
will give it back to you in exchange for more convenient 
money.'* 

Any great change in the laws of any country has its source 
in the people. The people of certain nations of Europe 
decreed by their acts that the coinage of silver must stop. 

The people of the United States have passed a similar 
decree. And in this decision all, the silver bugs as well as 
the gold bugs, have joined. The free silver advocate is no 
more willing than the sound money man to accept pocket- 
fuls of silver in payment of accounts. If he gets $50 of the 
metal he strikes a bee line for a bank and converts it into 
paper or gold, or places it to his credit, and draws out paper 
or gold, as he wants it. He has directly aided in its " de- 
monetization," and in depressing its commercial value. Al- 
though he cries ''free silver," he carries bills or gold in his 
pockets, and leaves the silver for the government to hoard in 
idleness. 

And the United States Treasury's hoard of silver is abso- 
lutely idle and useless. The 1894 report of the Bureau of 
the Mint places the sum at $514,000,000. It is almost worth- 
less as an asset, because there is no possible way to use it. 
Pensioners, contractors, and employes of the government, 
whether free silver advocates or otherwise, refuse to accept 
it in payment for services and bills. 

For the same reason it is worth nothing as a support to 
the credit of the government. On the contrary, it is, for 
good reasons, a peril and a menace. 

Any other government would melt much of it down and 
sell it ; but the Western mine owners hold the balance of 
power at Washington, and they do not want it put on the 
market in competition with their product. 

If gold could be obtained for a good part of it, the whole 
country would soon have great cause to rejoice. Such a deal 
would be a great bargain and a great blessing. Our fiat 
money would have substantial support, and. our national 
finances could be handled with ease and confidence. 

Furthermore, the stability it would give would soon largely 
increase our supply of good money, and our rate per capita. 

The facts here stated and the statistics given make plain 
the causes of the decline in the prices of silver, and of the 
largely increased ratio of value between gold and silver* 



DOLI.ARS, OR WHAT? 43 



FLUCTUATIONS IN THE SILVER DOLLAR. 

The following table shows, in the years named, the fluctu- 
ation in the intrinsic value of the silver dollar. 

YEARS. HIGHEST. I^OWEST. 

1876 99 cents 79 cents 

1878 93 cents 83 cents 

1879 91 cents 82 cents 

1886 79 cents 71 cents 

1890 92 cents 74 cents 

1892 74 cents 64 cents 

1893 65 cents 50 cents 

Only years are given in which the change was most 
striking. Fluctuations, however, have been marked each 
year since the large overproduction of silver began to glut 
the market. 

If the country had been on a silver basis in the year 1876, 
for instance, a dollar of any kind of money would have been 
worth in July, 1876, 79 cents, and in December, 99 cents. 
In the following year it would have been worth about 90 
cents, and down again in 1878 to 83 cents ; up again in 1879 
to 81 cents, and so on through each year down to the present 
time. In 1893 it dropped from 65 cents to about 50 cents, a 
change in value of 23 per cent, in a single year. 

The capacity of production being now practically unlimit- 
ed, its fluctuation will inevitably continue. 

Great hardship and uncertainty would result if wages, 
salaries, the products of labor, contracts- and credits were 
based on such money. 

And the poor man, who earns his living by the sweat of 
brow, would suffer most. While at times the dollar of 95 
or 99 cents might keep him in comfort, his wife and little 
ones would be sorely pinched when the dollar dropped to 65 
or to 50 cents. His wages would not go up and down with 
the dollar, but his food and clothing would do so. 

And furthermore, the uncertainty of values would so dis- 
turb the business of his employer that work would be pre- 
carious. His employment and subsistence would fluctuate 
with the output of the silver mine. He would be constantly 
on the ragged edge, and at the mercy of adventurous mine 
operators and speculators. 

The wage earner, above all other men, is vitally concerned 
in a fixed, unchanging standard of money. His living is too 



44 DOLLARS, OR WHAT? 

slender to admit of the risk of change and speculation. H 
cannot afford to base it on the chance of any industry, es 
pecially not that of silver mining. 

The silver dollar appears to be a mighty good dollar now 
sinoe it buys anything that can be bought with any other 
kind of a dollar ; but this is simply because it is braced up 
by, and made interchangeable with, the gold dollar. 

But if it stood alone, without a law or a policy that make 
it exchangeable for lOO cents in gold, its purchasing valu 
would be as uncertain as the wind and weather. 

It cannot be that any man who understands this matte 
favors free coinage of silver, which means a silver basis an 
unsteady money. 



i 



On a silver money basts all the market values in the 
United States would change with the 7'ising and setting 
of the sun. 




STANDARD OF GRAIN MEASURE. 

A bushel is the standard measure of grain. Contracts of 
sale and purchase are made on this basis. And it is a stable 
measure, because it does not change. 

But suppose it were a fluctuating measure, a little more 
to-day, a little less to-morrow — what confusion would result ! 
When the farmer sold his wheat he would be obliged to do a 
complicated sum in mathematics to find out how much he 
got for it. 

Yet there would be less confusion in a changing grain 
measure than in a changing money measure, because the 
effect of the latter would be more general. 

And a silver standard would be such a money measure be- 
cause silver is a commodity of uncertain market value. 

With a silver basis, or measure of money, the farmer would 
be at as great loss to know what he got for his wheat, barley, 



DOLLARS, OR WHAT ? 45 

corn, oats and rye as if the bushel basis or measure of grain 
changed every day. 

Gold is now the unchanging measure of money just as the 
bushel is the unchanging measure of corn. 

Can any practical man desire to change either ? 



RATIO BETWEEN GOLD AND SILVER. 

''Coin" has a good deal to say about the commercial ratio 
of silver to gold. He goes back a century or two and shows 
that this ratio was fairly steady through the period he goes 
over. This is true, and there were a number of good rea- 
sons for it, the chief being that the production of gold and 
silver were happily in about the proportions needed. 

But it suits his purpose not to go further back than 1687. 
Prior to 1680, covering the period from 1493, there had been 
a change of 50 per cent, in the ratio. 

The "appreciation" of gold and the depreciation of silver 
through this period is a very interesting circumstance in con- 
nection with the silver doctrine. 

And the cause of the decline in silver was the same as 
now, namely, a largely increased production, though it 
worked more slowly for two reasons. First, owing to the 
fact that in former times there was a scarcity of both gold 
and silver, and it was not difficult to absorb as money all 
that could be had of either ; secondly, all movements were 
slow a few hundred years ago ; what is now accomplished 
within two or three years then required a century. The in- 
creased production of silver was slow, and though the quan- 
tity was comparatively small, the per cent, compared with 
production in former years was great. 

The commercial ratio of silver to gold in the 15th century 
was a fraction over 10 to i. In the 17th century it was a 
fraction over 15 to i. This was in 1680. 

"Coin," conveniently, begins his table in 1687, and com- 
pletely ignores the most remarkable change that ever oc- 
curred between the metals, the most remarkable owing to the 
general scarcity of money of all kinds, and particularly of the 
precious metals. And the change is clearly directly trace- 
able to the ratio of productioji between the metals, 



46 DOIvLARS, OR WHAT? 

On pages 174 and 175 of the report of the Bureau of the 
Mint, 1894, may be found a table showing the production of 
both in the 15th, i6th and 17th centuries. In the early part 
of the 15th century the per centage of silver produced was 
very small, being from 1493 to 1520 only $54,703,000, while 
the production of gold in the same period was $107,931,000. 
The ratio at that time was not far from 10 to i. But the 
output of silver soon began to largely increase, and after 
1544 the production of gold began to fall off. The following 
table from page 175 of the report shows the relative produc- 
tion in value of the metals during the period referred to. 

Per Cent, of Production. 
Year, A. D. Gold. Silver. 

1493-1520 66 33 

1521-1544 55 44 

1545-1560 30 69 

1561-1580 26 73 

1591-1600 22 78 

1601-1620 24 75 

1621-1640 25 74 

i64i-i66o 27 72 

1661-1680 30 69 



In 1680 the ratio of values stood at something ovj 
15 to I. 



The above table explains the cause of the decline in silve? 
in that period, and no argument is needed. 

Its production largely increased, and that of gold largely 
declined. There was no "demonetization," or "unfriendly" 
silver legislation in that day. It could have been affected 
only by the natural laws of supply and demand. Considering 
the conditions then prevailing the decline was even more re- 
markable than the decline of 50 per cent, in the value of 
silver since 1873. In the latter period its output became so ^ 
great that, owing to its bulk and weight, the currency systems 
of the world could not absorb it. 

The table referred to extends down to the present time, 
and, if considered with reference to general conditions and 
influences at different periods, is an interesting study. It 
gives convincing proof that a double standard of money value 
has at all times been uncertain. No proof ought to be needed 
that such a standard, on any basis, is now impossible, owing 
to the fact that there is now a real surplus of silver; and 
anything of which there is a surf Ins is of unstable value and 
-purely speculative^ subject to sudden and violent fluctuations . 
^o such thing can furuish a safe .fittaiicial corner st:one. 



DOI^IvARS, OR WHAT? 47 

No country can prosper on a money basis bobbing up and 
down. There could be no certain profit in business, nor any 
steady or satisfactory remuneration for labor, with dollars 
worth 60 cents to-day, and 55 or 65 cents to-morrow. 

A silver standard in America would make it necessary for 
a man each day to wait the silver quotations from the London 
market, to ascertain how much money he had, how much his 
neighbor owed him, or how much he owed his neighbor. As 
to wages, or the cost of living a month or year in the future, 
he could form small estimate. No equitable scale of wages 
could be agreed on between employer and employe. The 
money would be liable to go down in purchasing value till the 
workman could not live on his pay ; or it might go up till it 
would bankrupt the employer. There could be no confidence 
between the men who give work and those who work. 
Frequent adjustments would be a necessity. Strikes -and 
grievances would multiply ; uncertainty in pay and profit, and 
dissatisfaction would become general. 

If a man insured his life for the benefit of his family, he 
could make no estimate of what they would really get at his 
death. The sum might be more than he counted, or it might 
be a great deal less. 

If he sold his house, or his farm, for a given sum, the note 
he took in payment would be in the nature of a lottery ticket; 
the money might go up, and the final payment be more than 
he expected, or it might go down and be less than he ex- 
pected. If he were in debt the rise might enable him to 
square accounts with ease ; or the decline might embarrass or 
cripple him. He might draw a prize or a blank. 

It is doubtless unfortunate for mankind that silver has be- 
come so abundant that it is unsteady in value, and conse- 
quently uncertain and unsafe as a basis of money. It is also 
unfortunate for the farmer that overproduction and competi- 
tion have so greatly reduced the price of wheat; but these 
facts exist, and it is more sensible to look them squarely in 
the face, than to theorize, worry, and upset things generally, 
in a vain effort to change them. 

It may be unfortunate that gold is now the only money 
metal that has a safely steady value on which present or 
future obligations can with equal safety be based, but such is 
the case ; and it does no good to fret and rail about it. Natural 
and irresistible agencies, controlled by no class of men, 
brought about this condition; and, if the condition ever 



48 DOIvI/ARS, OR WHAT? 

changes, natural, and not unnatural agencies must bring 
the change. It can not be done by legislative edicts 
Washington. 




EXPORTS OF SILVER. 

The production of silver in this country continues to add 
to our money circulation an amount equal to the marketable 
value of all the metal mined, less the amount used in 
domestic arts. The surplus is exported, and either brings an 
equal amount of gold into the country or keeps an equal 
amount of gold from going out. In 1894 we exported and 
sold abroad $39,555,879 of domestic silver. This silver either 
added or saved to our currency an equal amount of money. 
If it had been coined into money and kept at home, we should 
have been obliged to send abroad an equal amount of gold, 
unless we had increased our indebtedness to foreign lenders. 
The United States does not destroy silver when it quits coining 
the metal. It is sold, and our circulation increased that much. 
The increase creates no apprehension and is substantial. It is 
gold, and each dollar has an intrinsic value of 100 cents. If 
the silver were coined into dollars they would add more to the 
volume of circulation, but would possess an intrinsic value 
no greater than the export value of the metal ; and its coinage 
would drive out more gold than the gain in silver circulation. 



OBSTACLES IN THE WAY OF FREE SILVER. 

If the currency of the United States were not on a gold 
basis, and there were no gold in circulation, the free coinage 
of silver could be accomplished without sudden shock and 
disaster, because no large part of the money would be with- 
drawn from circulation, suddenly contracting the currency; 
and also because there would be no sudden and violent un- 
settling of credits and values, and sudden withdrawals of 
foreign capital. Under a well arranged note system, based 



DOLLARS, OR WHAT? 49 

on silver, there would be a gradual increase in the volume of 
money, and possibly a general rise in values; though so long 
as the paper were within safe limits higher prices would re- 
sult rather than from the cheapening of silver, the basis of 
the money, from increased over-supply, than from the actual 
volume of currency put out. Under such circumtances the 
free silver advocates could obtain their desire — an immediate 
increase in the money supply. 

There are good grounds, however, for the belief that the 
United States would, under any system on a silver basis, be 
under serious disadvantages as a progressive nation, and 
that owing to these disadvantages its enterprises would 
languish ; but if we were not on a gold basis, it could by free 
coinage doubtless make money, such as it would be, abund- 
ant, without the danger of serious disturbance for the time 
being, its fluctuation in value not considered. (This assump- 
tion, however, it may be said, is theoretical.) 

This is what the free silver people desire to accomplish. 
But they overlook the fact that $626,000,000 of our money 
is gold, and that this part of it would immediately disappear, 
and by sudden contraction, disastrously defeat their purpose. 
They ignore our foreign indebtedness of probably about 
$2,000,000,000, a large part of which would have to be 
settled, and soon take all the available gold, and much silver 
besides. 

These are some of the difficulties in the way of free coin- 
age. It would seem that they are simple and clear enough 
for reasoning men to see them. They are so appalling that 
if we should ignore them we should become a nation of 
bankrupts and the wonder of the world. 



Free coinage of silver means a silver basis ^ zuith silver as 
the only metallic money ^ and a loss to the currency of 
$626^000,000 gold. 




50 DOLLARS, OR WHAT > 

DO WE WANT BIMETALLISM? 

There was in the United States on November 
elsewhere stated, approximately $625,000,000 silver and 
$626,000,000 gold. 

Shall we use both the silver and the gold, or shall we use 
only one, and get rid of $626,000,000 of the other money? 

To use both is bimetallism ; to use one is monometallism. 
Are we bimetallists, or are we monometallists? 

England is practically a monometallic country, since it 
uses but $112,000,000 of silver, all told, and that as a lim- 
ited legal tender. China, Japan, Mexico and most South 
American countries are also monometallic countries, since 
they use only silver. France and Germany are bimetallic 
countries, both using gold and silver; the latter in larger 
quantities than England, and a large per cent, of it as a full 
legal tender. 

France, next to the United States, uses more legal tender 
silver than any other bimetallic country, the amount being 
$434,000,000. 

Germany uses $215,000,000, all told, only $105,000,000 
being legal tender. 

The United States has $549,000,000 full legal tender silver, 
$626,000,000 legal tender gold, and $76,000,000 silver half 
dollars, quarters and dimes, which are limited legal tender. 
Both kinds of money, under our present laws and policy, are 
good, and both (excepting the fractional coin) a full legal 
tender for the payment of debts to individuals or of dues to 
the government. 

Are we satisfied to keep and use them both in safe quan- 
tities or are we partial and obstinate, and shall we determine 
to use but one and drive the other out of circulation and out 
of the country? 

I believe these are needless questions. 

It would be hard to see what the country could gain and 
easy to see what it would lose by such a course. The 
masses of the people of the South and North — ninety-nine 
in every hundred — are straight out bimetallists. The writer 
is a bimetallist. He believes with the ninety-nine in every 
hundred Southern and Northern men, in the use of both 
gold and silver, and all other good money we can get; but 
he does not believe in using more silver than can be handled 



DOIvLARS, OR WHAT ? 51 

with convenience to the people, and safety to the Govern- 
ment. He believes also that the coinage of silver should be 
regnlated by its absorption as a circulating medium — by the 
amount the people are willing to take and use, and keep in 
circulation — its idle accumulation in large sums in the 
treasury vaults being useless and dangerous at the present 
ratio. He does not, however, believe in schemes to force 
the increased and inconvenient use of silver by the with- 
drawal from circulation of small denominations of paper 
money. 

Now, how are we to continue bimetallism? The silver 
dollar circulates in the same channels as the gold dollar, of 
equal purchasing and debt-paying value. 

But the gold dollar has an intrinsic and marketable value 
nearly double the silver dollar. It can be melted down and 
sold at the rate of about $20 per ounce, or for one hundred 
cents, in any country in the world, but if the silver dollar 
be melted down it can be sold for only about sixty-two cents 
an ounce (the present market price), or something over 
FIFTY cents. Then why does the gold dollar circulate with 
the silver dollar? Why do not the people melt down their 
gold dollars and sell them, and keep the dollars with less 
marketable value for use in paying obligations and making 
purchases? 

Is it because the United States has put its dollar stamp on 
the silver piece ? 

No. That stamp, of itself, does not add the fraction of a 
cent to the value of the silver piece. 

It is because the affirmed policy of the United States 
makes its silver dollar interchangeable with its gold dollar; 
and because it undertakes to keep not less than $100,000»000 
in gold on hand, so that it may have an abundance of the 
dollars of one hundred cents marketable value to maintain 
the interchangeable quality of its cheaper, fluctuating silver 
money, and its otherwise worthless paper money. Thus we 
have bimetallism as the word is generally understood. 

But it ought not to be hard to see that this $100,000,000 
gold reserve is already subject to considerable strain. It 
supports all the silver, either in the form of coined silver or 
paper silver certificates, and all other forms of paper, making 
a total of about eleven hundred million dallars directly- 
dependent ou ihsX xesprye for its full /ace valjue^ 



52 DOIylyARS, OR WHAT? 

Now, if under our present financial system we coin any 
more silver we increase the strain on the gold reserve^ which 
alone makes all our money o^^^. it is comparatively a small 
sum, say one-eleventh of the money it supports and gives 
value to. It could not have been kept on hand a week at 
any time since it was established but for the confidence the 
world has in the promises and integrity of the Government. 
One-eleventh of the fiat money of the country taken to the 
Treasury window would have taken it all out. But trusting 
the Government's integrity of purpcse, and its ability to 
maintain that gold reserve, none of it was ever drawn upon, 
except for purely cojmnercial purposes, till the Sherman law 
was passed in 1890 providing for increased coinage of silver 
at the rate of $54,000,000 per annum, thus increasing by 
that amount annually the strain on that gold reserve. 
Serious financial disturbances followed. The gold reserve 
declined rapidly. The danger became so great and so immi- 
nent that the Sherman law was repealed in 1893, though 
with great difficulty, owing chiefly to the obstructive meas- 
ures of Senators from the mining districts of the West, who 
wanted to put the country on a silver basis. Full confidence 
has not yet returned. It was retarded by the appearance of 
a strong and determined free coinage element in the Fifty-; 
third Congress. 

Now, with these simple facts before him, stated in a 
straightforward way, the writer is sure that any candid nian^. 
(though he may have advocated free coinage) must admiti 
that the United States cannot coin any considerable quantity" 
more silver without wiping out that gold reserve. 

Admitting this, we get back to the question : Do we wantJ 
bimetallism ? Do we want to use both gold and silver asl 
now, and have about $24* per capita good, full value money, 
or are we willing to drive out the gold for the sake of coining 
the product of the Western mines, and have, for a time at 
least, only about $16 poor money per capita, worth really 
only about $8 full value per capita ? We would increase the 
$8 per capita as the Western mines turned out silver and as 
other countries might sell us their accumulation of the un- 
wieldy metal. But we should be so hopelessly bankrupted 
that those of us now living would not feel much concern as 
to the future supply of the uncertain and cumbersome money. 

That supply would probably eventually be abundant, 

* Xhe 1894 government reports estimate about $25 per capita, 



DOIvLARS, OR WHAT ? 53 

though depreciating and fluctuating, and therefore constantly 
unsettling values and trade. But in the meantime, with 
money on the basis of $8, present purchase value, per capita, 
what would become of the people and industries of the United 
States — a people accustomed to $24 per capita, and enjoying 
credits to the extent of probably $15,000,000,000 or $20,000,- 
000,000* based directly on that $24 per capita and on that 
$100,000,000 gold reserve ? 

Is there a man in America whose imagination would not 
stagger under an attempt to conceive the consequences of 
such a calamity? 

While Mexico and the Western silver mines rehabilitated 
our currency with a metal which the people now absolutely 
refuse to accept in any quantity, and of which only about 
fifty-six million full legal tender dollars can possibly be cir- 
culated (a great part of that lying idly in the bank vaults), 
what would become of the idle, penniless men, women and 
children of the United States, with creditors like wolves 
swarming about them ? 

Is there any man who can read the plain, truthful state- 
ments here made and not understand them ? And if he 
understands them, is he a bimetallist, or is he for free coin- 
age and silver monometallism? 

Of what avail are such sophistries, catching cartoons, in- 
genious illustrations, questionings and deceptive reasonings 
as are contained in '' Coin's Financial School " when set 
against the serious facts and simple, naked truths of the real 
situation ? It is little less than criminal to deal in sophistries 
and artful deceptions when such momentous interests are at 
stake. 

We want bimetallism, and not silver monometallism. 



FREE COINAGE NOT FREE DISTRIBUTIOK. 

Suppose it be admitted that the free coinage of silver 
would be a blessing, and would at once increase the volume 
of money in the country as a whole — in what way would it 
increase the supply in individual pockets? 
• Including indivi(ivial indebtedness credits are estiinated at |4o,ocx),ooo,ooo. 



54 DOLLARS, OR WHAT? 

How would it even increase the supply in non-silver pro- 
ducing sections? 

Free silver does not mean that the government would coin 
and send it about the country on pack horses and in wagons 
inviting every man to help himself. There will be no " forty 
acres and a mule " distribution, unless it be to the Western 
miners, at the end of this free silver fight, no matter how it 
may terminate. 

The metal is produced in the mining sections of the West. 
The people who mine it would have the privilege of sending 
it to the government mints and getting it coined into money. 
When coined it would belong to them. 

They would not scatter it around among their friends in 
Georgia, South Carolina and Illinois. They would take it 
back to Montana and Colorado. 

If vast quantities of silver were mined the people out West 
might accumulate vast quantities of money. The " silver 
bugs " of that section might become as rich and obnoxious 
as the *' gold bugs" of the East. Denver might become a 
great money center, but what advantage would that be 
the people of Alabama or Michigan ? 

There is already idle money by the hundreds of millions 
in some sections of the country, but the people of other sec- 
tions cannot get it because they buy about as much as they 
sell, and have no favorable balance of trade to bring it to 
them. 

If the silver barons of the west were multiplied by the 
score, and if all the followers of the mining camps were to 
grow rich and great, it is not easy to see how the farmers of 
Mississippi or Ohio would be benefited any more than they 
are now benefited by the vast accumulations of money stored 
in the vaults of Eastern banks. 

If every tenth man in Colorado were made a millionaire, 
and the fortunes of all were in cash, that accumulation of 
money could no more put up prices than do the present 
hoards in the East. 

The truth is that the supply of money has little to do with 
prices, which are based on the cost of production, but regu- 
lated by supply and demand. They are affected also by the 
state of credits. 

Prosperity, which stimulates prices, depends upon safe 
(pj.edits more than upon the volume of money. 



d 



DOLtAk^, Ok WUAf> $s 

Money may be abundant, and prosperity wholly lacking ; 
but credit cannot be abundant without prosperity. 

Confidence, which is the basis of credit, increases the use 
and active supply of money. It is also a great distributor of 
money, a great equalizer of its circulation. 

The advocates of inflation, whether by free coinage of sil- 
ver, or other methods, destroy confidence and thus destroy 
the only rational means of securing what they really want, 
an active increase of the volume of money in the channels 
of trade. 

They get hold of the wrong horn of the dilemma. They 
propose an artificial and consequently unsafe increase in the 
money supply, believing that they can thus increase the cir- 
culation and put up prices. 

The plan inevitably works the wrong way. Too many 
distrust the scheme. 

The money is locked up, nobody wants to invest, or to buy 
beyond actual needs, and prices go down instead of up. 

Then the stump orator comes upon the scene, abuses the 
*'gold bugs," and lays the consequences of this folly at the 
door of the *' money power." 



J^ree silver would reduce by half the value of all -pensions , 
wages^ life insurance payments^ bank deposits^ and other evi- 
dences of credit. 



GOLD STANDARD AND PROSPERITY. 

Free silver orators and writers claim that we have tried 
the gold standard since 1878, and that things have gradually 
grown worse, and that it is now time to try something else, 
meaning free silver. This statement is untrue in every par- 
ticular. The period from 1878 to 1890 was in all respects 
the most prosperous in the history of the country. The in- 
crease in population, the industrial growth, the influx of for- 



DOUvARS, OR WHAT?' 

eign capital and the expansion of enterprise was not merely 
extraordinary, it was marvelous. It was a development 
never equaled, or even approached, in any country in the 
history of the world. In 1878 the West was practically un- 
settled and undeveloped. Since then its broad acres have 
been brought under cultivation, and its hamlets have become 
populous and prosperous cities. In 1878 the South practic- 
ally had neither capital nor manufacturing industries. Its 
iron and coal were almost untouched ; its railroads were 
lacking in traffic, in bad repair, without substantial equip- 
ment or organization, and for eighteen years there had been 
little new construction. In those twelve years three and a 
half times as many cotton mills were built in the South as 
were built during the previous one hundred years. The in- 
crease of spindles was more than 350 per cent. More capi- 
tal was invested in mining and iron production, ten times 
over, than in the previous history of the country since its 
settlement. The same activity and energy prevailed in air 
lines of industry. The development of the West and North- 
west was not less wonderful. Denver, Kansas City, St. Paul, 
Minneapolis, Detroit and Milwaukee grew from townships to 
big cities ; the population of Chicago grew from a few hun- 
dred thousand to a million inhabitants. The North also en| 
joyed unequaled prosperity. In that period our stock of gold 
increased from $213,000,000 to $690,000,000, a net increase of 
$477,000,000; our stock of silver increased from $87,000,000 
to $440,000,000, a net increase of $353,000,000. Deposits in 
State and National banks increased from $800,000,000 to 
$2,200,000,000, showing in twelve years the unprecedented 
increase of nearly 300 per cent, in the savings and accumu- 
lations of the people. And in the same period the bonded 
debt of the United States, about which the free silver men 
make so much noise, was reduced from nearly $1,800,000,000 
to about $600,000,000, a great reduction of two-thirds or say, 
about $1,200,000,000 of the interest bearing debt of the 
country. The credit of the nation was so improved that the 
rate of interest on government bonds was reduced from a 
five per cent, to a three per cent, basis. Throughout tb 
country, as a whole, prosperity reigned, and if the people 
were not satisfied with the condition it was because content- 
ment is not the lot of humanity. 

It is certain that the Western silver barons were disgrun 
led through all these years, the brightest in the annals of an 



I 



DOLLARS, OR WHAT ? 57 

people, an they were persistently and surely undermining 
the confidence which made such magnificent growth and 
prosperity possible. Their movements were watched with 
keen and anxious interest the world over by the men of capi- 
tal and enterprise, who had set the busy wheels of progress 
in motion. In 1890 they forced the passage of the Sherman 
law, the baneful effect of which almost criminal blunder is 
fully explained in other articles in this work, and is known 
to the whole world. Prosperity and progress were soon at 
an end. The country was no longer safely on a gold basis. 
Distrust, uncertainty and stagnation supplanted hope, confi- 
dence and activity. 

The free silver people claim that if the Sherman law was the 
cause of these misfortunes, that its repeal in 1893 ought to 
have removed them. Such argument is extremely foolish. 
It is a fact well known to the world that the Fifty-third Con- 
gress was practically a free silver body. " The failure of a bill 
to sustain the faith and credit of the government was greeted 
with cheers from members in the lower house. It is also 
loudly and vociferously heralded by free silver advocates that 
the doctrine is spreading and taking deeper root in all parts of 
the land. With our gold standard so vigorously assailed since 
the day the Sherman law was repealed, and its very existence 
in such grave doubt, no well informed, well balanced man 
would argue that the country is, or has been since 1893, in 
position to further test the merits of the gold standard. But 
as any candid man must admit, its merits were fully tested 
from 1878 to 1890, and with results that amazed mankind. 
But in 1890, as stated, its existence was threatened, and that 
folly also amazed mankind, excepting only the advocates of 
free silver. 



THE LOSSES OF 1893. 

It has been claimed that the banks "combined" to raid the 
Treasury and bring on the panic of 1893. ^^ ought not be 
necessary to combat this absurd contention, but so many 
people believe it to be true that it may not be amiss to show 
Avho sustained the losses of that calamity. 




58 DOI^IvARS, OR WHAT? 

The New York Herald estimated, from actual market 
quotations, that within a short time the shrinkage in the 
value of stocks and bonds listed on the New York Stock 
Exchange was $700,000,000. These stocks were largely 
owned or held by banks as collateral for loans. Scores of 
operators in Wall street were beggared. Nearly 700 banks 
throughout the country, many of which afterward became 
wholly insolvent from sudden shrinkage of assets, were forced 
to close doors. Capitalists and investors suffered in propor- 
tion. The total losses directly and indirectly sustained by 
the moneyed interests of the country amounted to thousands 
of millions. Banks that did not fail, lost heavily, suffering in 
many instances serious impairment of capital. Deposits 
shrunk from 25 to 75 per cent., and banking for a time, to 
say nothing of losses, was wholly without profit; and owing 
to general stagnation and uncertainty, there has since been 
no money in the business. 

Even the free silver advocate does not claim that the 
bankers and capitalists of the country are fools. Yet this is 
the only conclusion if they really *' combined'' to bring on 
that panic. Such losses surely follow all panics, and nobody 
understands this so well as the man who handles money. 

To stay the general disaster at the time, the New York 
banks imperiled their own safety by loaning money to banks 
in every part of the Union. I doubt whether there would 
have been a dozen banks with open doors in Tennessee if aid 
from the New York '*gold bugs" had been refused, and the 
ruin of business men and borrowers of all classes would have 
been complete. What is said of Tennessee was true in 
greater or less degree of all Southern and Western states. 
The ''gold bugs" used clearing house certificates at home, 
and at great risk sent good money throughout the land in 
answer to the general cry of distress. These facts are well 
known to every well posted man. The writer believes that 
these bankers have made some mistakes in policy, as all men 
do; but whatever their errors of judgment, they have never 
"conspired" against the government or people, and the free 
silver sections of the South and West owe them a debt of 
gratitude that must remain long unsettled. 

It may be added that the reason bank men, almost as 
unit oppose free silver is, not that they want to "conspire" 
against anybody, but because they so thoroughly understand 
the disaster that would follow. They know that its increased 

mm 



Mk 



DOLLARS, OR WHAT? 59 

coinage under the Sherman act brought the panic of 1893. 
They do not guess or think that this was the cause, but they 
know that it was. And they do not want any more silver 
panics, particularly not a free silver panic, which they also 
know would be the worst of all. They know that they could 
not stand the consequent losses, and they know that the 
people could not stand them. The only selfish motive they 
have in trying to maintain the present gold standard is to re- 
store prosperity to the country, and consequently to restore 
their former earnings and profits. This is a kind of selfish- 
ness common to all men. 

This article is not intended in any sense as a vindication 
of bankers and moneyed men, but merely to remove mistaken 
notions which are in the way of sound money legislation. 

Men send for a doctor when they are sick, a lawyer when 
they want legal redress, a preacher when they want spiritual 
comfort, a plumber when the water pipe bursts ; they go to 
an architect when they want to build a house, send the horse 
to the blacksmith when they want him shod, engage a 
gardener to turn the ground and plant seed, and hire a rail 
splitter when the farm needs fencing; but when finances get 
out of joint, they abuse and turn a deaf ear to the men who 
handle the money and know most about it. There is a flaw 
somewhere in this general way of doing things. It might be 
well for awhile as an experiment to have the lawyers shoe 
the horses and the rail splitters dose the sick. If the shoes 
pinched and the patients languished, these things would be 
in keeping with the clumsy tinkering and patching by 
novices of the nation's finances. 



THE "MONEY POWER." 

Suppose, for the sake of argument, we admit the false 
notion that the ''money power" is unreasonably prejudiced 
against silver. Is a remedy possible if applied only in the 
United States? And how can any legal remedy be applied? 
Money cannot be legislated out of bank vaults at home and 
abroad, and out of the pockets of the people, and put into 
circulation in the United States. We are necessarily a 



IS 

i 

d 

y 

I 



60 DOI.LARS, OR WHAT? 

borrowing people, and whether that policy be right or wrong, 
we are not in condition, nor in position, to put a stop to 
borrowing. We must have foreign money, and also the use 
of home accumulations, to carry our obligations and to de- 
velop our resources. But can we pass laws to make English- 
men send over money to build our railroads; to make home 
capitalists build and operate furnaces, mills, open mines and 
buy our surplus lands, and to make lenders discount our notes 
and accept our bills? 

When we agitate and approach free coinage all these peopl 
lock their money up. Home money lenders are alarmed an 
foreign capitalists look upon us with contempt. Industria 
progress comes to a standstill. We may fuss and fume and 
beat the air all we are a mind to, but our impotent fury 
merely closes the money chests tighter. The people we rail^, 
at are not merely the Rothchilds, a few great financial con^ 
cerns in England, and a few thousand bankers in America 
That vague, greatly abused and little understood thing, th 
" money power," is a mightier force than even the populists 
claim that it is. It is the PEOPIyE~the millions of intelli 
gent, thrifty and prudent people who have put aside th 
accumulations of their industry. Every man who has saved 
and owns money, whether the sum be $100 or $100,000, or 
who holds the notes of his neighbor, who is a depositor in a 
savings bank, or who is an investor in securities, state bonds 
or mortgages, is one of the '* money power." If his hoard 
be only $100 he is as easily frightened and runs to cover as 
quickly as the man with a million. He is, indeed, more apt 
to lock his money up and put it entirely out of sight and out 
of reach than the larger and broader holder. If you tiave 
anything to sell, you cannot sell it to him. Price counts foiH 
nothing. If you ask him to join you in an enterprise, he"^ 
laughs at you. If you would borrow of him, he shies at your 
collateral. He may not be learned in the science of money. 
He may tell you that he knows nothing about the financial^ 
question, but he knows how to make you pay if you ow« 
him; and if you scare him, he knows how to lock up hii 
money and to keep it. 

He may be a populist or a free silver advocate — many oi 
these I have observed grip the purse strings tightest, and 
they generally grab for gold when they put money into holes 
or stockings — but whatever he be, he is one of that mighty 
army composing the " money power." There are some six 

mm 






DOIwIvARS, OR WHAT? 6i 

or eight millions of them. They fill every vocation and 
avenue of life. They are lawyers, doctors, artisans, mer- 
chants, laborers, farmers, preachers, beggars, guardians, trust- 
ees, executors, capitalists, men and women, old and young. 

They own the stock of the savings banks, the national 
banks, trust companies and other corporations; own the 
money deposits; and the officers of these institutions are 
merely the paid instruments used by them. If they heap 
money upon bank counters, these custodians of their earnings 
must use great care and discretion in fhe keeping and dis- 
position of their funds. If they want the money they have 
committed to the care of the banks, whether to invest or 
to hoard, it must always be ready for them. The banker is 
branded with incompetency and disgrace, or with dereliction 
of duty and sent to prison, if he cannot pay. This is the 
*' money power" that cornered money and brought on the 
panic of 1893. Whatever may be the precipitating cause, it 
is the " power" that brings on all financial disturbances. It 
is the "power" which now distrusts the financial policy of 
the United States. It is the " power " which believes that 
there is more silver in the mines of the world than can be 
safely used as money by the United States without driving 
out its better money — gold — and which fears great disaster 
from further silver legislation. It is a "power" which can- 
not be driven or legislated into buying and selling, lending, 
building and developing. It will stand stock still till it gets 
ready to move. Railery, threats and denunciation do not 
budge it. It is the power of human avarice and self-preser- 
vation. Show it gain, confidence, stability, and it welcomes 
you. Threaten it with free coinage of silver and depreciated 
money and it draws away in alarm, yet grim and resolute. 

Since this almighty " money power " is afraid of free silver, 
and will again and indefinitely arrest every industry and 
enterprise in the country if that heresy be threatened or in- 
stituted, what folly and madness to fly in the face of it ! 

We want prosperity, and we cannot have it unless we 
fully satisfy the people who have money to invest, whether 
in small or large sums. 

The free silver people do not look at the practical con- 
dition and situation of things. They have a theory, and 
reason in the abstract. They block progress and distress the 
country exploiting that theory. They would withdraw the 
corner stone of thousands of millions of credits and topple 



62 DOLLARS, OR WHAT? 

the whole financial and commercial structure experimenting 
with that theory. Practical men know that it is a mere 
theory, vicious and dangerous. It is a catching theory, be- 
cause with it is coupled abuse of the ** money power" which 
so many voters fail utterly to comprehend. The voter him- 
self may be an important factor in the *' money power," yet 
unable to understand it — be filled with prejudice and resent- 
ment against it. Any of us who are industrious and thrifty, 
and who have saved money, are part of that much abused 
and really potential '* power." 

Will a large per cent, of the voters of the country continue 
to blindly follow these free coinage theorists, or have they 
had enough of them and of the disasters that follow in their 
wake? 

If we want to start our mills and give life to our enter^ 
prises, they furnish us no money with which to do these 
things. The worst and loudest of them merely want our 
votes and the fat offices we can give them. It is to the 
" money power " we must look for the means of paying our 
labor and handling our products. If we want to sell a farm, 
a horse, a crop of wheat, a bale of cotton, a town lot, we 
never think of the free coinage orator, but go to some person 
who belongs to the " money power " and strike him for a 
trade. Let us make friends with these people, and cast out 
utterly the theorists and designing demagogues, who would 
destroy us, professing (for our votes) to love us, and to be 
infinitely concerned for us. 



"PRIVILEGES" OF NATIONAL BANKS. 






National Banks have no " privileges," in the sense that 
they are a favored class of institutions. During, and for a 
time subsequent to the war period, when government bonds 
were low priced, and bore high rates of interest, there was a 
good profit in National bank note circulation, but that day 
has passed; and there is now a well defined loss to the 
National banks in the exercise of their " privileges." This 
has been the case for a good many years. 

To issue $45,000 circulation now, a bank must invest 



DOLI.ARS, OR WHAT? 63 

$57,000 of its capital in United States bonds, to be deposited 
with the United States Treasury to secure its circulation. 
This estimate is based on four per cent, bonds at 1.14, about 
an average price for eighteen months. 

The bank must then deposit $2,250 with the Treasurer to 
the credit of a fund known as the five per cent, redemption 
fund, leaving it the use of $42,750 on an investment of 
$57,000. Therefore it loses entirely the use of $14,250 of its 
capital. Money is worth eight per cent, throughout the 
South and West, and in other localities. Counting interest 
at eight per cent, the loss on this item annually is $1,140. 

The four per cent, bonds mature in 1907 — twelve years 
hence. At maturity the face value only will be paid. There- 
fore in twelve years the bank loses $7,000 premium it paid 
for the bonds. The annual loss on this item is $583. 

There is a tax of one per cent, on the circulation. The 
loss on this account is annually $450. 

These three items constitute the principal cost of the Na- 
tional banking "privileges.** 

There is but one item of profit, which is the interest on 
the bonds. This for twelve months is $2,000. 

Therefore, at the end of the year, the account stands as 
follows : 

Interest on the $14,250 item $1,140 

Annual loss on the $7,000 premium item 583 

Tax on circulation 450 

Total loss $2,174 

I^ess interest on $50,000 bonds 2,000 

Net loss to bank , $ 173 

Counting the $14,250 item on a basis of six per cent, there 
would be an apparent profit of $112 ; but it would be appar- 
ent only. Other items of expense incident to the system 
would much more than wipe it out. But I base the estimate 
on eight per cent., as it is in the East only and in the money 
centers that lower rates prevail. 

Other items of cost are National bank examiners* fees, $50 
per year, if two examinations are made ; the advertising of 
five annual statements ; the exchange and express charges 
in keeping intact the $2,250 redemption fund, and in trans- 
portation of new issues of notes ; loss in circulation while 
new notes are in process of substitution for old, or mutilated 
notes ; attention and labor in making various reports, and 



64 DOLLARS, OR WHAT? 



^ 



Other items of direct or indirect cost. It is safe to say tliat 
the "privilege" costs a National bank, issuing $45,000 cur- 
rency, directly, not less than $350 per annum. 

If the bank has a large line of deposits the cost is mucli 
more, owing to increased work in making examinations and 
reports. 

In reserve cities banks are also required to carry twenty 
five per cent, reserve, their own notes, and other specified 
moneys and sight exchange not counting as part of this re- 
serve. The class of assets they carry and the kind of paper 
they discount is also prescribed by law or regulation 

A State bank, with equal capital and deposits, can maki 
more money than a National bank. As at present constitu- 
ted, the National banking system is a decaying system, and 
no new National banks would be organized but for the rea- 
son that the people trust them more than they do State 
banks, and the more readily patronize them. And this is an 
anomally, considering the general prejudice against them. 

It is readily seen that it is a mistaken prejudice. It is one 
that would soon disappear if the facts were known. As re- 
cently stated by the JVew Tork jfournal of Commerce and 
Co7nmercial Bulletin^ this prejudice has much to do with the 
free silver sentiment of the South and other sections, and if 
pains were taken by the press to publish the simple facts, 
and make them generally understood, the most serious diffi- 
culty in the way of a simple and proper revision of our cur- 
rency system would be removed. 




BANK NOTE CIRCULATION.* 

The writer is not one of those who are entirely satis^ 
with the present inflexible financial system and unequal dis- 
tribution of money. 

The government circulation is fixed and cannot be safely 
expanded, nor could it be properly distributed if it could be 
changed. 

There is a loss to National banks in issuing currency, an 



See also article "A Word to the East." 



J 



DOLLARS, OR WHAT? 65 

consequently there can be no general expansion of bank note 
circulation to meet local needs. 

Such expansion at certain seasons is a serious need, and 
can be provided for only through the medium of banks. 

And through that medium only by making circulation 
profitable to banks. 

Men do not do business merely to be obliging. They do 
it for profit. Bankers are neither worse nor better than other 
people. The farmer does not grow wheat, hogs and cattle to 
oblige his neighbors. He purposes getting a living out of 
the products of his farm. The merchant does not sell sugar 
and coffee, shoes and domestic, merely because the people 
need these things ; he sells them for profit ; for the purpose 
of support and accumulation. Nor can the banker be ex- 
pected to employ his capital in providing a circulating me- 
dium unless he gets a fair profit out of it. And this should 
be given to him — not to favor him or to make his a favored 
business, but to put his business on such basis that he can 
afford to supply the money that is actually needed in his 
locality. 

The people must have money. It must be supplied in 
some way, and it cannot be supplied in the varying volume 
needed in different localities except through banks of issue. 

If money is needed in a particular locality to move a crop 
or to aid particular undertakings, the government cannot 
place the money there when wanted, but a local bank of issue 
could do so. And, it could retire the money when the need 
for it passed. And if the law gave such banks a profit in 
their circulation, as it should, they would supply the country 
with all the money that could be safely used. The banker 
would gain no more than the people. His profits would be 
limited to the profitable employment of his money by the 
people. His occupation would be open to competition, as is 
that of the merchant, the farmer, the lawyer. Anybody 
could engage in banking. To say that he would enjoy a 
monopoly would be foolish. If he wickedly conspired with 
his fellows to ''contract" the currency — the iniquitous com- 
binations that the stump politician talks about — he would 
contract his profits in proportion. If he squeezed and bank- 
rupted his customers he would bankrupt himself. He would 
grow rich no faster than equally capable men in other lines 
of business. The fear of combinations to "contract" the 
currency if all paper money were issued by private iastitu- 



66 DOLLARS, OR WHAT ? 

tions is entirely groundless. People who hold such views 
overlook the fact that banks now have, and have always had 
the power to *' contract" loans, which amounts to exactly the 
same thing; but nobody ever heard of a combination of 
banks for this purpose. The banks of any city in the coun- 
try have it in their power at any time to call loans, and to 
close the doors of one-half or two-thirds of the business peo- 
ple. But no such combination was ever formed for such pur- 
pose, nor will such combination ever be formed, either to call 
loans, make money dear and squeeze customers, or to '* con- 
tract" bank note circulation for a similar purpose. Willful 
''contraction" of bank note circulation, under a general bank 
note system, would mean nothing more nor less than the call- 
ing of loans and consequent business embarrassment, which 
bankers themselves could afford no more than could their 
customers. Any such apprehension is based on imperfect 
knowledge of the business relations between bankers and 
their customers. 

Unfortunately somebody must do the banking, since 
ninety-five per cent, of all the business of the country is 
done through the banks ; ninety- five per cent, of all obliga- 
tions are settled with bank checks ; and people would find 
themselves not only put to great inconvenience, but wonder- 
fully short of funds, if these evidences of credit, this 
immense and ready currency — ^bank checks — were withdrawn 
from circulation. The pinch would be acute. The panic of 
1893, or of 1873, of 1857, o^ ^^37) o^ <^f ^^y other time, 
would be a financial oasis compared with the collapse that 
would follow the withdrawal of the bank check circulation. 
The populistic and at present foolish cry for a money circu- 
lation of $50 per capita would be none too loud nor too fer- 
vent. Yet the banks generally pay for printing all these 
checks, handle them all, pay postage and lose exchange in 
collecting them, employ expert men to keep the accounts 
without charge, and often at serious risk and loss. 

I said unfortunately somebody must do this work, and 
render these invaluable services to the people, for it does 
seem unfortunate that the necessity exists for a business 
class which must be so roundly abused by every demagogue 
who wants an office, and by every man who owns a share in 
a Western silver mine, whose product he wants the govern- 
ment to buy.* 

*See article, "A Word to the East." 



DOLLARS, OR WHAT ? 67 

OUR INDEBTEDNESS ABROAD.* 

Careless writers and speakers encourage a ruinous policy 
of repudiation by asserting that America pays an annual 
interest to Europe of $200,000,000. Such claims are absurd 
in the extreme. It is probable that if all the American 
stocks and bonds held abroad were interest-paying securities, 
the charge might amount to $75,000,000 or $100,000,000. 
But large quantities of them default in interest, and are 
otherwise under a cloud. Many of the properties repre- 
sented are constantly going through the processes of reor- 
ganization. A number of the largest railway systems of the 
country, with their stocks largely owned by foreigners, have 
failed to pay interest, gone into the hands of receivers, and 
the principal, to say nothing of interest, largely scaled under 
reorganization agreements. It is doubtful whether the actual 
interest payments to Europe exceed $50,000,000 or $60,000,- 
000. This is a large sum, but a comparatively small one for 
70,000,000 people owning the richest country on the globe. 
The writer does not believe in the policy of extravagant 
borrowing. To borrow money for safe and legitimate under- 
takings and enterprises is well enough — is, indeed, desirable; 
while reckless borrowing leads to disaster. But we already 
owe Europe, not a very extravagant sum total of money, 
which was loaned us by all classes over there, and whether 
it was all wisely borrowed or not, it would be very unwise to 
repudiate any part of the debt by paying it in depreciated 
silver or otherwise. We cannot, as a civilized, commercial 
and progressive people, live within ourselves, and we cannot 
afford to have all other nations give us the cold shoulder. 
Possibly future generations might recover in a commercial 
and industrial sense from such course, but those of us now 
in charge of this part of the planet would like some pleas- 
ure and profit from our possessions. 

Let me illustrate: In 1887 the city of Chattanooga, the 
home of the writer, a city of probably 20,000 population at 
that time, bought and sold, if I remember correctly, 
$12,000,000 of real estate. The figures are not material, the 
amount being very large. That was a boom period of great 
inflation, extravagance and going in debt. When the bubble 

*The author has at hand no statistics of foreign indebtedness nor of 
interest payments, but believes the estimates in this article to be fairly 
correct. 



68 DOIvI^ARS, OR WHAT? 

burst, and our people began to count up and ascertain their 
true condition, they found themselves in a bad fix. They 
owed, in the aggregate, for a small town, an immense sum 
of money. Such inflation and indebtedness ought to have 
staggered a city of five times our population. But what did 
our people do? Call a mass meeting and agree to repudiate? 
Offer a compromise at 25, 50 or 60 cents on the dollar? 
They were not made of that sort of material. They went to 
work like men, and have practically squared the account. 
Most of us are wiser than before, and shall likely be more 
careful in future about how much paper we sign for either 
real estate or borrowed money. 

But suppose we had repudiated. What sort of a city 
would we now have? Who would want to come, invest 
money and live among us? If any of us were looking for a 
new home, would we risk our money or cast our lot with a 
people who had repudiated, or made a ''settlement" of just 
obligations they could have paid? 

No, as a matter of self-interest, and as a matter of com- 
mon justice, we do not want to scale our debts to foreign 
countries. The Chattanooga people do not, the writer is 
certain, since they stood up unflinchingly under pro rata 
burdens many times as great ; nor do the good people of any 
other city or community in America. All that need be done 
is to let them understand fully the intent and real meaning 
of all this free silver talk, and the legitimate consequences 
of such policy in practice. Such understanding would, of 
course, fail of efiect on the silver mine owners, who have 
been trying for twenty years to get the people to pay all 
debts with the product of their mines. But other people 
will not indorse any such policy when they understand its 
meaning. 

If our foreign obligations are a source of serious worry 
and apprehension, the only safe or right course is to retrench 
and economize as a nation and people for a few years and 
pay them. A few years of rigid economy would wipe out 
every evidence of obligation to Europe. If we would leave 
off" our fine ways of living, and return to something like the 
honest simplicity of our fathers, we should soon square 
accounts with the Rothschilds, and all the other "gold bugs" 
of Europe, and elsewhere, as to that matter. 

We have been too extravagant ; too reckless in public and 
private affairs. No conservative man doubts that. But if 



m 



DOLLARS, OR WHAT? 69 

we are restless and in a hurry to settle, the best way out — 
the only way out, unless we intend to invite calamity — is to 
economize and pay out. Fortunately, we have the resources 
and ability to settle within a comparatively short time if we 
are impatient to do so, and get down to hard pan living and 
economy. Too great haste to pay, however, under the cir- 
cumstances, is childish and unwise, but it is infinitely safer 
and more preferable than payment at a discount. There 
will be, if we pursue an honest policy, really no need ever to 
pay or reduce our obligations abroad. Nor will there be 
cause for alarm or distress on account of our indebtedness to 
foreigners. 



HOW TO GET MORE MONEY. 

The following table gives per capita circulation of money 
in the principal countries of the world, fractions in most in- 
stances omitted :* 

United States $25 00 

England 20 00 

France 36 cx) 

Germany , 19 00 

Austria 9 co 

Netherlands 25 00 

Belgium 26 cx) 

Italy 9 CX) 

Spain 18 00 

Portugal 25 00 

Russia 8 00 

Roumania 6 34 

Turkey 2 29 

Australia 24 00 

Japan 4 00 

India 3 33 

China 2 08 

Bulgaria i 76 

Mexico 4 71 

Central America States 3 78 

South America States 17 00 

It may be noted that the gold standard countries are, as a 
whole, in money circulation, far in advance of the silver 
countries, and some of the silver countries have a greatly 
depreciated paper currency, which brings up their per capita 
circulation. 

* 1894 Report of the Bureau of the Mint, page 45. 



70 DOLLARS, OR WHAT ? 

It is a significant fact that all of the great progressive 
nations are on a gold basis. 

It appears that France has the largest per capita circula- 
tion of any country in the world. It has $1,317,000,000 
metallic money. This is but $67,000,000 more metallic 
money than the United States had in November last ; but 
the advantage of France is in its large stock of gold, giving 
it a perfectly safe basis for $36 per capita. As shown else- 
where, that country has $825,000,000 of gold and #492,000,- 
000 of silver. We have $133,000,000 more silver and $200,- 
000,000 less gold than France. If we had say $1,200,000,000 
of gold, we, too, might have a safe basis for $36 per capita, 
and, owing to our large system of bank credits, money would, 
at the same per capita, be vastly more abundant with us than 
in France. 

And if we would drop our free silver and inflation theories 
our stock of gold would largely and rapidly increase. We 
should soon have a safe basis for all the money that any free 
silverite or greenbacker could want. Our threats of free 
silver drive out the gold. The only way that we can really 
get an increased volume of good money is to increase our 
gold basis, as France has done. This we can easily do if we 
discard the silver mania and take our finances out of politics. 

Confidence invites gold; and it would attract it to this 
country in large quantities, owing to our large field for 
investments. 

We could easily keep at home our own annual output of 
nearly fifty millions, which is increasing, and also draw largely 
from other countries. If we were sensible and practical 
financiers we should soon have $30 to $40 per capita, on the 
best money basis in the world. We should have, considering 
our system of credits, more money than we should know 
what to do with ; and too much money is a misfortue — worse, 
if possible, than not having enough. If there had never been 
a greenback or free silver party in this country, we should 
now have vastly more than $24 per capita. And it would 
have been money above suspicion. 

Silver experiments and free silver agitation have kept from 
us, and even driven from us in large volume, the only real 
basis of money. We have lost directly and indirectly on this 
account not less than $500,000,000 of gold within ten years. 
This is a perfectly safe estimate, and may be easily shown to 
be so. Here is a loss of more than $7 per capita of the basis 



^H 



DOLLARS. OR WHAT? 71 

alone of good currency, and our foolish financiering in former 
years has also cost us dearly. If this country had been upon 
an absolutely safe financial basis for twenty years, we should 
now have more gold, as well as more silver, and a larger circu- 
lation per capita than any country on earth. Considering 
these easily demonstrated facts, the talk of free coinage and 
a silver basis is puerile and ridiculous. 



"COIN'S FINANCIAL SCHOOL" 

This is the title of a book, written in a popular vein, 
emanating from Chicago. Its author is neither a lunatic noi 
a fool, but a clever and ingenious writer, It is not wise ta 
ignore such productions. This one is calculated to unsettle 
a pretty clear headed man whose convictions are not based on 
a knowledge of commercial laws and financial subjects. A 
number of sound financial principles are admitted, and 
demonstrated, and adroitly turned to account of free silver 
argument. For instance, he is not an inflationist, as the 
populists understand the term. He practically admits that 
money can not be issued and made good by the simple fiat 
of the maker, whether the maker be a government or an in- 
stitution. He practically admits that there must be a definite 
promise to pay, and that the kind of payment must be 
specified. These fundamental principles of finance place the 
writer somewhat in advance of the average inflationist and 
free silver advocate. 

He also practically admits that gold would at once go to a 
premium, and go out of the country under free coinage. 
And the remedy proposed for this has the only common 
sense principle in support of his theories. He would put less 
money in the gold dollar, and make its commercial value the 
same as that of the silver dollar. This suggestion is sound 
in principle, but for many reasons not sound in practice, as 
he would apply it. To put a commercial dollar's worth of 
silver in a silver dollar, were it clear that two standards are 
now possible, would be more sensible. To change the stand- 
ard of value in America would mean commercial ostracism. 
It would mean a complete unsettling of all our vast system 



72 DOIvLARS, OR WHAT? 



^ 



of credits. This he also practically admits — even makes a 
point of. He goes so far as to intimate also by inference 
that such result would enable us to pay our debts on a re- 
duced basis — say 40, 50 or 60 cents on the dollar, that is to 
say, on a silver basis, whatever basis of value that might be. 

The basis of every argument he makes is that the alleged 
" demonetization " of silver by the great nations has cut off 
the "demand" for silver, and consequently reduced its com- 
mercial value and the value of everything else. The com- 
mercial law of supply and demand he fully recognizes; but 
his remedy for the decline in silver is the old rehash — 
universal free coinage. If that be not possible, he takes the 
bold position of the Western mine owners, that the United 
States, single handed, can and must raise the sacred metal 
to a parity with gold. He completely ignores the fact that the 
enormous production of silver during the past thirty years is 
giving civilized nations more of the cumbersome metal than 
they can absorb as legal tender money, and its consequent 
" demonetization." He calls it the " money of the people ;" 
but the truth is, the people prefer any other kind of money. 
They will not have it. If the merchant gives his customer, 
who has made a 25-cent purchase, $9.75 silver change for 
a $10 gold piece, or bill, the customer objects ; and, nine 
chances to one, is offended if the merchant insists that he 
must take it. Most of us remember the general outcry made 
when the "shinplaster" was withdrawn from circulation, 
and the people forced to use fractional silver, instead. That 
was a move in the interest of the silver mine owners. These 
men, aggressive and alert, have never lost an opportunity to 
advance their mining interests, and their indifference to the 
convenience and interests of everybody else has been cool 
and complete. And they have never lost an inch of ground. 

A serious item of expense of nearly all interior banks is 
the transportation of surplus silver to the government sub- 
treasuries. Silver accumulates daily; the banks can do 
nothing with it ; customers will not accept it ; other banks 
will not take it in settlement of balances ; even the populists 
and free silverites spurn it, and demand paper or gold ; so 
bankers must pay double rate express charges to transport it 
to the government storage houses, and get gold or paper for 
it — get such money as the people will take. The bank the 
author manages is obliged to make such shipments and ex- 



.JM 



DOLLARS, OR WHAT? 73 

changes every month, sometimes two or three times during 
the month. 

It was found during the panic of 1893 that a good way to 
stop a run on a bank was to pay in silver. The people pre-* 
ferred taking the chances of the bank breaking, rather than 
lug the silver about. The writer remembers one instance of 
a man who became well nigh frantic with $3,000 in silver, 
which he had drawn from a bank, in his possession. He 
finally put it back into the bank, and remarked that the 
blank bank could go to blank and the silver with it. About 
five-sixths of all the silver in the United States is in the gov- 
ernment storage vaults, and a great part of all not there is in 
the vaults of the banks, and almost the whole of it would be 
stored in the Treasury or banks but for the fact that the 
people are obliged to use silver currency for change. Such 
well known, but much ignored facts, make plain the assertion 
that the monetary systems of the world can not absorb un- 
limited quantities of silver ; and also make it plain why 
nations with definitely organized monetary systems were 
obliged to limit its use. 

The author of "Coin's Financial School" points out the 
fact that the production of gold within recent years has been 
immense, and that this metal has not declined in value 
because it was not "demonetized." This is merely a bare 
assertion, without any support, and palpably false. Gold 
has much value in small compass, as he himself forcibly 
shows; is convenient, easily handled, and in every way 
desirable, as money in large or small quantities ; $500 in gold 
may be carried about the person, while $50 in silver cannot. 
All the nations on earth might commit the "crime" of 
alleged " demonetization" against gold, and yet it would lose 
none of its commercial value, and continue to circulate, 
without depreciation, as money. That is to say, if gold were 
"demonetized" the world over to no greater extent than 
silver has been "demonetized" in America since the "crime" 
of 1873, such "discrimination " would not affect the value of 
the metal. 

" Coin's Financial School " contains some false statements 
of facts, probably the most important of which is that this 
country owes five thousand millions of dollars to foreigners. 
Trustworthy authorities place this indebtedness at less than 
two thousand millions, and it is safely within that sum. 
But if it were five thousand millions, no worse argument 




74 DOI^IvARS, OR WHAT ? 

could be offered in favor of free coinage of silver. The sud- 
den withdrawal of foreign capital, and the sudden demand 
for payment of even*one-tentli of that sum would leave few 
solvent business men or institutions in the United States. 

It may be popular in some quarters to rail at our creditors, 
and it may have been foolish to borrow so much money, 
either directly, or in the sale of our securities ; but the obli- 
gations are out just the same, and we should be the worst 
nation of fools alive, if we were to so thoroughly alarm our 
creditors that they would demand payment. This they will 
certainly do, if we seriously threaten a silver basis. The 
practical effect would be precisely the same as with a bank 
if it were to threaten to pay its depositors 40, 50 or 60 cents 
on the dollar. That bank would not be able to keep open 
doors twenty-four hours. Let a merchant threaten to settle 
his bills at 50 per cent, discount, and his creditors would 
pounce upon him in a hurry. If you are a farmer and have 
sold your neighbor a horse or a cow, and he blusters about 
the neighborhood and says he does not intend to pay but 
half the debt, how long will it take you to find a lawyer and 
a constable ; — or, if you be combative and quick of temper, 
to pummel him? 

The United States, through its free coinage demagogues 
and mine owners, has blustered a good deal and paid most 
dearly for it. The " Coin " book contains a great deal of 
bluster, and is a reminder of absurd and ridiculous speeches 
made in Congress by representatives from the mining camps. 

It is thought by some that this book does not merit par- 
ticular notice. It is a book intended for the masses not 
versed in financial matters ; its deceptive illustrations, ready 
and mischievous suggestions, its false reasoning, assertions, 
and ingenious statements, are so interwoven with the demon- 
stration of a few sound principles, not generally admitted by 
the free silver people, that it is calculated to mislead many 
readers. 

The book has no merit, because it makes no candid state- 
ment of truth. It represents fully and completely the views 
and interests of an element in the Western mining states and 
the real purposes of nobody else. Its author barely attempts 
to conceal his predilection for silver monometallism, and the 
desire to bring about that calamity would seem to be clear 
throughout the book. Such literature is only suited to the 
purposes of the silver mining camps, in whose interest it 



^il 



DOLLARS, OR WHAT ? 



75 



pleads, and it can influence people in other sections only 
where it deceives, and its apparently thinly veiled purpose is 
misunderstood. 

The free silver people, generally, are as honest and good 
citizens as any of us, and, outside the mining districts, are as 
sincere in their views ; but they would, without due consid- 
eration, commit the country to a wrongful policy they would 
not approve, if applied to individuals — a policy that would 
react and do them and the country infinite mischief. 

The real sentiment of Southern and Northern "friends'^ 
of silver is for bimetallism, and not for silver monometallism, 
as taught in this work. Their only error is in the means 
they would use to maintain, or continue it. Put them right 
on that, and the difference between them and the sound 
money men would be small. 



THE RISE IN COAL OIL AND BEEF. 

The following is a quotation from the New York Times of 
April 13th : 

*' Oil was selling around fifty- three cents a barrel about two 
years ago, and the supply was so much greater than the de- 
mand that production fell off on account of the low prices. 
Things have changed wonderfully since then and oil has been 
gradually creeping up in price. The dollar mark was reached 
at the opening of the present year. Oil sold yesterday at 
$1.80 per barrel. The decrease of the stocks and the con- 
tinued drain of production had begun to excite comments, 
and the world awakened to the situation. It was seen that 
an enormous demand had been created for Pennsylvania oil, 
which demand had exhausted the supply, outgrown the abil- 
ity of the country to satisfy, and on the heels of a failing 
production." 

The Nezv York Herald, on the same date, commented on 
the advance in price of beef as follows : 

" The Herald's special dispatch from St. Louis last night 
says : ' Beef is now higher than it has been in the recollec- 
tion of dealers since war times. It is said by the butchers 
that the rise in beef, as well as in mutton, will continue until 



76 DOLLARS, OR WHAT? 

June 1st.' Our Chicago dispatch this morning gives som' 
interesting data respecting the present supply of cattle, and 
states that 'during the first four months of 1894 the prices at 
the yards ranged from 61^^ to 7 cents ; now they range from 
9 to 10 cents.' " 

It may be seen that within two years coal oil has advanced 
350 per cent, and beef cattle have within a few months ad- 
vanced nearly 100 per cent. These are both great stapL 
productions of our country. 

"Coin's Financial School" contains an ingenious but silly 
table, with three rows of figures, showing that the staple 
products of cotton and wheat steadily declined in about the 
same proportion as silver. The writer elsewhere clearly 
points out the causes of the decline in those two staples, and 
that the decline must have come whether silver had been 40 
cents or $2.00 an ounce. 

It may be here asked why beef and coal oil have gone to 
such high prices with silver fluctuating around 60 cents per 
ounce? In December, 1878, when silver was $1.10 per ounce, 
the farmers of Tennessee got only 4 to 4^ cents per pound 
gross for good beef. The question here asked ought to make 
the little "financier," "Coin," squirm. And such facts ought 
to convince everybody of the humbuggery of that misleading 
book. 1 

Beef went up because the supply was short; coal oil went 
up in greater proportion because the supply not only de- 
creased, but the demand increased. The price of silver had 
no more to do with the rise of either, nor the decline of whea 
and cotton, than the man in the moon. 

Supply and demand control the prices of all commodities 
Special conditions exert an influence, but necessarily to a 
limited extent. 



I 



li 



« COIN'S" UNIT OF VALUE. 

A good deal has been said about Coin's "unit' 
3711^ grains of pure silver.' The free silver people have 
made a great talk about it, and some persons on the 
side of the controversy have seriously attempted to 




I 



DOLLARS, OR WHAT? 77 

that there was really never any such silver unit as Coin 
speaks of. 
- All of this is nonsense. 

"Coin's" unit is clap-trap. It is one of the farces of the 
"school." 

Copper was at one timfe a "unit." Coon skins were of the 
units in the days of barter. 

What have the copper unit, the coon skin unit, or the silver 
unit, each well enough in its day, to do with the unit of the 
present time? 

Copper ceased to be a unit because the metal became so 
abundant that it ceased to be of value as a money metal, 
coon skins ceased to be a unit because a better medium of 
exchange was found, and silver lost its place as a unit because 
it dropped below the modern standard of value. 

Gold is now the monetary standard, or unit. Who knows 
what this unit may be five hundred or five thousand years 
hence? 

Can anybody show what bearing the unit of thirty centu- 
ries — or of one century — ago has upon the question of a unit 
in the year 1895? 



"COIN'S" "UNLIMITED DEMAND." 

One of the most absurd of the many absurd statements in 
the "Financial School" is on page 27, where the assertion is 
made that "when the mints of the world are thrown open, 
and the governments say, we will take all the silver and gold 
that comes, an unlimited demand is established." 

The ability and capacity of governments are limited by 
the wants, needs and resources of the people they represent. 
If the people cannot, or will not use unlimited quantities of 
a certain kind of money, what use can the governments 
make of it? 

And, again : are not the markets of the whole world 
"open" to wheat, corn, cotton, — to all products of the soil, 
of the mill and the mine ? 

And do these wide and "open" markets give an "unlimit- 
ed" demand for products generally, or do they give fixed, 
permanent values ? 



73 



DOLIvARS, OR WHAT ? 



It is well known that they do neither. 

Then is it reasonable to suppose that the so called ^'un- 
limited demand" from precisely the same sources could per- 
manently raise and fix the price of silver in the face of large 
overproduction ? 

In considering this matter, peoplfe lose sight of, or ignore 
the fact that the "demand" for silver is really and definitely 
limited. 

If governments buy the metal in excess of the actual 
wants of the people, it becomes a useless accumulation, just 
as a surplus of wheat, corn, pork or iron become a useless 
accumulation in the hands of producers or speculators. 

And this idle accumulation pulls down the price. 

There are a few commodities for which the demand may 
be said to be unlimited, because the demand always exceeds 
the supply. The prices of such commodities are fairly 
steady, because the use of them is steady, and there is never «a 
a surplus. f | 

The demand for gold is unlimited because so far there has 
been no indication of an over-supply. There has been.no 
sag in its price, no glut in the market, no disposition in any^MI 
quarter to buy all that is offered. Its uses are in a sense un-^' 
limited because more could be used than has yet been pro- 
duced. J|| 

No effort has ever been made to ^'demonetize" gold, be-m 
cause its use as money has never injured the credit of any 
country. A nation that should attempt its demonetization^ 
would become the laughing stock of everybody. 

Silver, on the contrary, being largely overproduced, is lim- 
ited in its uses, and consequently cannot be in "unlimited 
demand." 



COIN'S FATAL ADMISSION. 



On page lo of the "Financial School" the fatal admission 
is made that gold and silver cannot both circulate when the, 
ratio of value is unequal. Coin here states that in 1853 it| 
became necessary to change the weight of silver coin to keep! 
silver from going out of the country. 



DOLLARS, OR WHAT? 79 

After this admission there is no foundation for any argu- 
ment made in the book. Beyond page 10 no thinking man 
need go to be convinced of the absurdity of the " school " in 
toto. 

If a difference of 3^ per cent, in the true ratio between 
gold and silver was sufficient to drive the more valuable 
metal out of the country, how can any man believe that both 
could remain in circulation and in the country under free 
coinage with a difference in the ratio of 35 to 50 per cent? 

At the time referred to silver was the most valuable metal. 
That is, if the silver dollar and the gold dollar had each been 
put upon the scales and weighed, the silver dollar would 
have sold for the most money. 

The intrinsic value has since been reversed, and the gold 
dollar is now worth much the most. It is worth almost two 
silver dollars. 

The silver dollar buys as much as the gold dollar, because 
the laws or policy of our government makes it exchangeable 
for a gold dollar. But if that policy were abandoned, and 
the coinage of gold and silver were made free, is it reason- 
able to suppose that the silver dollar, worth 50 or 60 cents, 
as the case might be, and the gold dollar worth 100 cents, 
would circulate side by side ? 

How can this question be seriously asked without a re- 
flection upon the intelligence of the man to whom it is put ? 

The gold would disappear in a twinkling.^ 

Within an hour after the passage of a free coinage bill at 
Washington, practically every gold dollar in the United States 
would go out of circulation. Within an hour the per capita 
money circulation would be reduced from $25 to $16. 

There would be no waiting to see whether this silverite 
stroke of finance would nearly double the price of silver, as 
the silver theorists claim that it would, but with the flash of 
electricity $626,000,000 of the best American money would 
disappear, to be seen no more only as it might be melted 
into bars and consigned to the coffers of more sensible 
peoples. And the same winged messages that bore the news 
of this incredible blunder would seal the financial doom of 
millions of men who owe money. 

The day of the Shylock would then indeed be at hand. 

Those who now demand the pound of flesh, might with 
serene confidence demand the whole carcass. 



8o DOLI.ARS, OR WHAT ? 

This is the calamity that the self-condemned doctrine 
" Coin " would precipitate. 



i 



THE DANGER OF "COIN'S" LOGIC. 

" Coin's Financial School " impresses the author as a book 
calculated to breed socialism, which, he thinks, ought to 
condemn it in the estimation of every law-abiding man. 
Whether so intended or not, its reading is calculated to sug- 
gest violence. 

Its adroit and powerful appeals to class prejudice is apt to 
strike a too responsive chord in the minds of a vicious and 
dangerous element which Europe has dumped upon our 
shores ; an element which throngs our large Northern cities, 
knows nothing of our laws and institutions, and composed aM| 
best of vicious agitators. All such people are very apt to 
construe Mr. Harvey's book to mean that the " crime," which 
it is claimed the moneyed classes have committed against 
the people, must be avenged. These ignorant and vicious 
people are very likely to conclude that the conspiracy of th 
rich must be met by a conspiracy of the poor, and they know 
no weapons but the bomb and the torch. The power of the 
ballot, and its peaceful revolutions, have no place in their 
understanding when they have wrongs real or imaginary to 
right. It is very unfortunate that any true American should 
deem it necessary or wise to use in any cause arguments 
calculated to stir the passions and prejudices of ignorance ; 
and it is still more unfortunate that many good and right- 
minded people do not see the tendency and danger of such 
logic. It is not the logic of a man who has a good cause, nor 
the kind of reasoning that good citizens will approve, if they 
do a little thinking for themselves. 

Those who believe in free coinage of silver desire to see 
a peaceful revolution that will bring about that result; but 
they shrink from blood and civil strife. They do not de 
sire to see class arrayed bitterly against class, the wage 
earner against the employer, the tenant against the landlord, 
the borrower against the lender, the poor against the rich. 
They believe in righting wrongs with the ballot and the law; ^ 



DOLLARS, OR WHAT ? 8i 

but they want no violence. During the great strikes of last 
year they saw and felt the danger of class prejudice stirred 
by leaders professing love of justice and humanity. 

In pleading his cause, Mr. Harvey makes the most of the 
unfortunate condition of the country during the past two or 
three years. He boldly and foolishly asserts that all the 
misfortunes of these years were the direct results of a law 
that stopped the unlimited coinage of silver. He also fool- 
ishly charges that the repeal of laws authorizing silver coin- 
age was a crime and a conspiracy. 

As elsewhere shown, Americans as a whole, and the peo- 
ples of other nations, the lowly and the great, the debtor and 
the creditor, one and all, are responsible for the so-called 
*' crime," the "demonetization" of silver. They prefer to 
use other money, gold and paper. If the people of the 
United States would take silver in quantities from the banks, 
and from one another, and draw out of the Treasury the 
immense idle hoard that lies there useless from year to year; 
and if the people of France and Germany, and other nations 
of Europe, would pursue a similar policy — then there would 
be no need to restrict the coinage of the metal, and the 
demand would immediately raise its value. 

But if the people of the United States (and the same con- 
dition applies elsewhere) refuse to use any more than about 
one-tenth (excepting silver change) of the country's stock, 
and compel the government to carry the remainder, who is 
to blame for its decline in value, and for the government's 
inability to maintain its coinage? 

Is it the creditor, the property owner, the capitalist, the 
banker, the "gold bugs," or is it THE PEOPLE who are 
responsible ? 

Mr. Harvey, in his book, says it is the rich; but is a mere 
assertion stronger than the facts? 

Was this great " crime " committed by the few, or by 
THE MANY? 

Did the "gold bugs" get together and "conspire" to carry 
only a little silver change in their pockets, or did THE 
PEOPLE, without any "conspiracy" at all, and with no 
thought of a "crime," simply find silver inconvenient, and 
decline to burden their pockets and persons with an over- 
supply of the stufF? 

The facts speak for themselves. 



82 DOLLARS, OR WHAT? 

They are obscured in Mr. Harvey's book. That is to say, 
all the relevant facts are obscured. He gets together a great 
many statistical facts regarding the precious metals, some of 
them interesting enough, but without any true bearing, as 
applied by him, upon the question at issue; and he then 
marshals more arguments calculated to rouse class prejudice 
than is contained in any other book the writer has ever had 
the misfortune to read. 

If Mr. Harvey is, as he claims, and which I do not dispute, 
concerned for the welfare of his countrymen, he is a blind 
guide. He is playing with fire. 1 beg all good citizens 
whose opinions have been influenced by him, to read his 
book again. Read carefully pages 103, and 130 to 135 in- 
clusive, and other pages as well. Examine attentively tb 
suggestive cuts and cartoons. 

I believe it may be said that ''Coin's Financial School" 
makes no calm appeal to the judgment, and little, if any, tq^ 
principle, as a guide for the conduct of men. 

The creditor is held up as an ugly Colossus, consuming the 
world, and the debtor is portrayed in all the misery of evi 
oppression. 

There are bad creditors and bad debtors ; but be it said t 
the honor of mankind that the majority of both are right 
minded, and in this circumstance lies the encouragement that 
Mr. Harvey's book, and much similar free silver literature^ 
may exert but a passing influence. 



11 



li 




THE "SILVER BUG." 

The "silver bug" is very common out West. Many 
them have emigrated East and live in great style, as they can 
well afford to do, in New York an(i other big cities. Unlike 
the ''gold bugs" they are a species peculiar to America, and 
unknown elsewhere. Their stock in trade has always been 
silver, and their methods of business intimidation and force, 
and although Uncle Sam is generally supposed to be a stiff- 
necked old fellow, they bullied him unmercifully ; bullied him 
into buying the declining product of their Western mines, on 
which he has pocketed an average loss of 40 per cent. They 
say — the admirers of the silver bugs say — that gold bug 
cornered the old fellow a short time ago and made $16 



5,ooca| 



DOLLARS, OR WHAT? 83 

000 in a bond deal. This is doubted, the conditions of the 
deal considered; but we have the cold figures on the ''silver 
bugs." Uncle Sam has lost more than $200,000,000 on the 
silver which they forced him to buy of them. The old fellow 
has kept a careful debt and credit account of his transactions 
with them and the proof is positive. Any one who would 
care to see the figures may find them on page sixteen of the 
1894 report, Bureau of the Mint. The average price of silver 
during the past two years need only be added to complete 
the estimate. Here are the figures: 

Cost of silver bought $508,933,975 

Market value, 60c per oz 305,360,385 

Net loss to the government $203,573,590 

This sum has gone into the pockets of the silver mine 
owners of the West ; and the North and South and other 
non-silver producing sections pay nearly all the taxes to 
make the loss good. It is nothing less than robbery under 
the thin guise of laws, saddled on the country by these peo- 
ple under threats and intimidation. 

Nothwithstanding these incredible, illgotten gains, the 
"silver bug,'' furious with greed, now has Uncle Sam by the 
throat, demanding unlimited spoils. 



OUT OF THE FRYING PAN INTO THE FIRE. 

There are a number of men within the writer's knowl- 
edge, and they doubtless represent a similar class throughout 
the country, who have till lately been pronounced believers 
in a stable and safe currency. But they have become dis- 
couraged. The panic of 1893, ^^^ subsequent and persistent 
pressure of hard times, with no sanguine outlook for the fu- 
ture, has disheartened them, as, indeed, it well might. The 
free silver people have made such a clamor, and made such 
extravagant promises, to be redeemed when they get into 
power, and the sotmd money men have said so little, that a 
good many people have concluded that they might as well 
let free coinage have a "chance." In other words, they are 
cutting loose from their true convictions, because they can- 
not see clearly a way out, and are getting ready to jump from 



84 DOLLARS, OR WHAT? 

the frying pan into the fire. They have made up thei: 
minds to help on the very thing that is doing all the mis 
chief. 

Since the Baring failure in England, general but not per- 
manent causes of depression have existed throughout the 
world ; but the free silver people, practically dictating the 
financial policy of the United States, have brought on all the 
acute phases of distress at home and done much harm abroad. 
They forced the passage of the Sherman law in 1890, which 
in four years drove $500,000,000 of foreign capital out of the 
country ; which loss would have bankrupted us but for the for- 
tunate circumstances of fine crops and large exports. In the 
midst of these withdrawals, and of a consequent run on the 
Treasury, with gold going to Europe in a stream, they fought 
the repeal of that law with desperate tenacity. They in- 
sisted that the Secretary of the Treasury should redeem gov- 
ernment money in silver, and thus bring the country to a 
silver basis, and reduce us to silver monometallism, with its 
attendant contraction of credits and currency. 

These leaders proved themselves incompetents as legisla' 
tors, wrangling over trivial matters, making long free silver 
speeches while the tariff issue was up, and still further, for 
months, unsettling the business of the country. At the last 
session of Congress they blustered, threatened and tried to 
bully the administration. They did and said more foolish 
and absurd things, exploited more theories, did more squirm- 
ing and dodging on important public matters, and exhibited 
greater incompetency, than any similar body of men in his- 
tory. The self-respecting, practical members of Congress 
were helpless. The American Congress became the butt of 
ridicule the world over. A broad smile went round the 
planet when it adjourned, and the people of the United 
States threw up their hats and "hollered." 

Do not, I beg, join company with these men. Rather 
beseech your honest, but mistaken neighbors, who trust 
them, to give them the cold shoulder when they come aroun 
at election time. 

Times are hard, but they will get better if these men ca 
be retired. The country, the South particularly, was never 
in such a condition to respond promptly to favorable influ- 
ences. There is nothing serious now the matter with th 
business outlook, if we had practical law-makers, or even th 
safe prospect of no more silver tinkering. Theorists hav 



DOI^IvARS, OR WHAT? 85 

done us enough mischief. They are really the men you 
have been "giving a chance" for a long time. They have 
been doing nothing but harm. Stick to your principles. 
Keep out of the fire. It would be worse than the frying pan, 
and though more acute, the agony would last longer. 



INTERNATIONAL BIMETALLISM. 

An "international agreement" as to the coinage of gold 
and silver means that the great civilized nations shall jointly 
agree upon a ratio between these metals, at which each of 
the contracting countries shall coin them into money. 

The ratio generally suggested in the United States is on 
a basis of 16 of silver to i of gold. That is, 16 times as 
much weight in the silver dollar as in the gold dollar. 

It means also that gold and silver when so coined shall be 
made interchangeable, on the agreed ratio, one with the 
other ; which is to say, that silver dollars must be kept at a 
parity with gold dollars. In other words, if the true market 
value of the silver dollar should be less than that of the 
gold dollar, then these contracting nations must keep, as the 
United States now does, a stock of gold sufiicient to exchange 
for all the silver dollars that may be offered for exchange. 

It does not mean that the -^'jligations of this international 
co-partnership shall be equr ',. 

It does not mean that the silver product of the world be 
apportioned and each nation make money of an equal part. 

Nor does it mean that one country shall be bound to 
accept as money, or to redeem, the silver coined by any 
other country. Bach country would be left to take care of, 
and maintain the interchangeable quality of its own coinage. 

These might be considered the essential features of an 
equitable " international agreement." 

It may be seen that the credits of the different countries 
would not be jointly pledged. It would be foolhardy to so 
pledge them. 

The United States, for instance, as now, would be under 
the necessity of maintaining the parity of her own gold and 
silver. She would have to keep a gold reserye as now XQ 



86 ' DOI^IvARS, OR WHAT ? 



redeem her silver dollars. She has now about ten times 
much silver money, excepting fractional silver, as her people 
will use, an idle accumulation of about $500,000,000 in the 
Treasury vaults. Her credit is already strained by buying 
gold to make silver dollars good. But under an international 
agreement she would be obliged to add an "unlimited " num- 
ber of silver dollars to the idle Treasury hoard. She would 
be obliged to make money of all the silver that might be 
offered; and if more gold were needed to float this silver 
currency, more bonds would, if possible, have to be sold to 
obtain the amount required. 

The parties to this international contract would be practic- 
ally England, the United States, France and Germany. Some 
other European countries would sign the agreement, but their 
aid would hardly be worth counting. 

Therefore the four countries named would be obliged to 
support the entire silver product of the world. 

The price for a time would be stimulated, as the advocates 
of an international agreement believe that it would. It might 
go up temporarily to $1.25 per ounce, or even reach an actual 
parity with gold on a coinage basis of 16 to i, which, how- 
ever, may well be doubted. 

But if so, the production would go up in proportion. The 
output in 1893 was over $200,000,000. It is safe to say that 
it would reach $250,000,000 per annum if the price could be 
maintained three or four years at $1.25 per ounce. This is a 
conservative estimate. The silver is in sight. Modern 
scientific and mechanical appliances and capital are at hand 
ready to take it from the mine. Our own mine owners of the 
West are burning with impatience, and an '* unlimited stiffly^'' 
would be forthcoming, v 

Could the United States, France, Germany and England 
furnish the "unlimited demand f^ 

The utmost human ingenuity could not stimulate its ab- 
sorption by India, China, and other slow-going semi-civilized 
countries, which have heretofore been the precarious customers 
for the surplus when the product reached no more than $160,- 
000,000 to $165,000,000 per annum. 

France, like America, has more silver than her people can, 
or will use. England and Germany have all that can be 
handled with convenience. 

Does anybody believe, in view of these facts, that the out- 
look for free coinage anywhere is promising? 



a^ H 



DOLLARS, OR WHAT? 87 

There will be no international agreement. The four great 
countries mainly concerned cannot bull the silver market so 
as to permanently maintain its parity with gold. The attempt 
would swamp them all. The United States would break 
down at the outset, and France would soon follow. 

All of these countries, excepting possibly the United States, 
are too wise to stake their credit and hazard the wellfare of 
their people on the chance of the silver mining industry. 

Many of our own law-makers know that the whole thing 
is a delusion. They have known that the appointment of 
commissioners to "international conferences" was a ridiculous 
farce. 

The agitation of even the "international" feature of the 
silver question is a disturbing factor in our financial policy, 
and it is time those who understand this matter speak out. 
And there are plenty of men who understand it fully. 

Once for all, the whole silver question should be settled, 
and relegated to the rear, where it belongs. I^et us get rid 
of the whole brood of fallacies and delusions concerning the 
issue, and turn our attention to practical financial needs. 



"FRIENDS" OF THE PEOPLE. 

The politician, who gets a living out of politics, and by 
far the greater part of whose business it is to influence votes, 
invariably poses as the " friend " of the people. Most of the 
people are poor and hard run ; it is human nature for them 
to feel that something or somebody is to blame — sometimes 
one or the other is — and the designing politician shrewdly 
turns this condition to his own account. He abuses without 
stint or distinction the lender whom these people owe ; he 
rails at the property owner, whose lands they till, and whose 
houses they occupy; he slurs the seller from whom they 
obtain supplies ; he denounces the employer who gives them 
work ; he throws mud savagely at every class, and at every 
individual toward whom he can hope to direct the prejudice 
of unfortunate voters. He is a hypocrite. He is a wolf in 
sheep's clothing. He would, if it served his interests, blast 
the people he professes to serve. He goes to the legislature 



88 DOIvIyARS, OR WHAT? 

or to Congress and accepts favors and bribes from unholy 
corporations, and unscrupulous schemers whom he so savage- 
ly denounced when talking to the people. For a railroad or 
a street car pass, or for a few shares of stock in a corporation, 
or in consideration of a "tip," as to the course of a stock on 
the stock exchange, to be manipulated by his bribers, he 
barters the people's rights, and lays upon them heavy bur- 
dens. To placate one class of voters he hurls epithets at 
another, to favor one class he levies tribute on and oppresses 
others, feeling sure always that the wronged ones are in the 
minority. To advance himself he betrays all, concealing as 
far as possible his treachery under the cloak of innocence. 

It just now suits the purpose of most of these " friends " 
of the people to pose on what they believe to be the popular 
side of the silver question in their respective districts or 
states. The question itself begets prejudices, and they are 
making the most of those that are natural, and are busily 
arousing others that are unnatural. They are trying to array 
class against class, interest against interest, the poor against 
the rich and well-to-do, sowing seeds of dissatisfaction, social- 
ism and communism. They are trying to make it appear 
that the interests of different business classes are widely dif- 
ferent, and have nothing in common, and that stagnation, 
contraction and loss will cheer and prosper one class, while 
it impoverishes and depresses all others. One must keep a 
pretty clear head, or he will conclude that the world is really 
out of joint when the preaching of such doctrine by such 
well known kind of preachers finds eager and attentive lis- 
teners. Right thinking and prudent men should denounce 
instead of embracing such dangerous heresies. Unjust and 
iniquitous combinations of capital do undoubtedly exist; 
combinations largely promoted and encouraged in secret by 
the bribe-taking *' friends" of the people ; and in the nature 
of things they will continue to exist till human nature 
changes, or the millennium comes. But they are confined 
to no business class or condition of men. And even these 
unrighteous combinations are vitally interested in the pros- 
perity of the people. It is a serious mistake to assume that 
anybody or any class can prosper on the general misfortunes 
of the country. It is a mistake fully as great to permit the 
judgment to be influenced by any ofiice-seeker whose in- 
tegrity and manhood are not known to be grounded on a rock. 



DOI.LARS, OR WHAT ? 89 

How many such did you ever know? How many do you 
know to-day ? The " friends" of the people are humbugs. 



SOUND MONEY CLUBS. 

The last few years of very hard times, to use a mild ex- 
pression, have put voters to thinking. The chains that 
bound them to party organizations, regardless of the issue 
at stake, have been slipping off. Sensible men have been 
thoroughly exasperated and disgusted with the dodging and 
shillyshallying of our public men, regardless of whether they 
belonged to this party or that. And it is most fortunate that 
this independence exists at this particular time. Few public 
men now in sight have expressed pronounced views on the 
question of free coinage of silver. Nearly all are cringing and 
dodging, and those most prominent are cringing and dodging 
most. No reference, of course, is made to the representa- 
tives from the mining camps and other pronounced free sil- 
ver theorists or demagogues. But the voters of the country 
are in no mood for double dealing, and they are going to 
force square issues and open expression. There will be less 
regard for party lines in the next campaign than in any other 
in the history of the country. With the sound money ele- 
ment the currency question will be paramount. And the 
same may be said of the pronounced free silver element. 

In view of these conditions, and the vital importance of 
the issue, sound money clubs should be formed throughout 
the country and a vigorous sound money campaign at once 
begun. Good literature on the issues involved should be 
systematically and widely distributed. Capable and forcible 
speakers should be engaged ; and the question publicly dis- 
cussed in all cities and villages where there is hope that such 
discussion can avail. But there should be no waste of effort. 
The territory should be carefully and judiciously laid out by 
states, and by districts in other states. Some sections are so 
hopelessly inflationist that it would be useless to attempt to 
convert them in the comparatively short time from now to 
the date of the next election. These, for the present, should 
be left to the silverites and populists. 



90 DOLLARS, OR WHAT? 

Sound money and a safe, permanent basis of credits will 
prevail. There is too much intelligence in the country to 
permit a further drop down the silver slide. But it needs to 
be further aroused and enlightened. The practical facts, finan- 
cial tests and arguments are all on the side of honest money. 
The enemy can deal only in theories, and "his only effective 
weapon is prejudice. Clearly informed, the people can be 
relied on to reach right conclusions. But there is serious work 
to do if decisive victory is to be won. 



A WORD TO THE EAST. 

The tremendous though mistaken pressure in many sec- 
tions for free coinage of silver has, at bottom, good cause and 
grave significance. It is not a mere sentiment, which is 
going to down. It has a substantial basis. The South, in 
particular, has entered an era of wonderful growth and de- 
velopment. Money is lacking in many localities to move 
new enterprises and to handle its immense increase in busi- 
ness. While confidence is a vastly more important factor 
just now, both are needed. 

The Bast has not a proper understanding of, nor due sym- 
pathy with, this real want for ''more money." There is, the 
writer believes, enough money in the country as a whole, 
and with the idle millions of unloanable funds in the East- 
ern States, the people there do not see what anybody wants 
with " more money." They are also disgusted with the 
demand in many quarters for inflation, pure and simple. 
They do not recognize the underlying cause for free silver. 
They see only its folly and danger, and believe the masses 
who advocate it to be repudiationists, which, in principle, 
they are not. It is only a certain class of office seekers and 
demagogues who are, many of them, without principle and 
do not care what happens, if only they get the offices. The 
masses are honest and earnest in seeking needed relief in 
the wrong directions. The East, being now the sound money 
section of the country, would act wisely if it would under- 
take to give proper direction to the general demand for 
" more money." To retire the greenbacks (which should be 



DOLLARS, OR WHAT? 91 

done) and permit national banks to issue notes only to the 
par value of the bonds, without a liberal emergency circula- 
tion, which appears to be the idea of many Eastern bankers, 
would not cure the trouble. That would be all right, doubt- 
less, for some sections, but not for others. It is more than 
probable that it would contract the present volume of cur- 
rency, which is not desirable, and which would instantly 
raise an almost universal outcry, such as would certainly 
result in wild financial legislation. It would embitter and 
intensify beyond measure the feeling against the moneyed 
interests. Men should not view these questions from local 
points of view. They require broad and comprehensive 
treatment. 

The Bast justly opposes free coinage as an unmitigated 
evil, beneficial to nodody and destructive to the interests of 
all; but unwisely offers no comprehensive substitute. It 
gives no general recognition to any movement likely to cure 
the present trouble and silence free silver agitation except 
from the mining regions of the West. The mine owners 
will never cease preaching free silver so long as there is a 
ton of silver ore in sight. 

Sound money clubs East, and all persons of all sections 
concerned for a sound currency, should endeavor to inform 
the people on the functions of banking and the necessity for 
an expansive bank note currency if we are to have safe 
financiering, and certainly escape the calainily of a silver 
basis. One of the greatest obstacles to this, the only rational 
solution of our difficulties, is the false notion that the govern- 
ment extends special ^'favors" to the moneyed classes if 
bankers are given a profit in their circulation. This erro- 
neous view has grown up only since the government unfortu- 
nately assumed banking functions ; and great pains should be 
taken to remove it. It ought not to be hard to show that it 
is a mistaken notion, and to demonstrate that there can be 
no other satisfactory solution of our financial troubles.* 

*See articles : " Privileges " of National Banks, and '• Bank Note Circu- 
lation.*' 



92 DOIylyARS, OR WHAT? 



PRESENT GENERAL CONDITIONS. 

Barring the financial situation there is nothing in the way 
of a strong and steady advance to prosperity. 

From 1890 to 1893 there was much liquidation the world 
over ; and since then it has been in America unprecedented. 
There has been no enterprise and little buying ; business 
stagnation and industrial paralysis have been almost com- 
plete. Never have so many people been so long in enforced 
idleness, and never have retrenchment and economy been 
greater or more general. Concerns and institutions on a weak 
basis have gone to the wall ; men seriously embarrassed^ 
seeing so little prospect ahead, have surrendered. 

All the wrecks are pretty well cleared away. Those on a 
safe footing, fearful of what a day might bring forth, have 
bent every energy to the reduction of liabilities. Manu- 
facturing has been below normal consumption. Stocks in 
first hands have been materially reduced, and in second and 
third hands the reduction has been very great. 

In the mercantile line, retailers and jobbers have long 
bought with extreme caution, and in quantities so small that 
supplies have barely met the reduced demand, and they have 
worked oflf accumulations of undesirable and, ordinarily, un- 
salable stock. 

The reduction of supplies in the hands of consumers, how- 
ever, has been greater than elsewhere. Losses by shrinkage, 
failure, stagnation and idleness have been so discouraging 
and so universal that people of all classes and conditions 
have reduced buying to the lowest possible limit. No man 
has been able to see when his condition would improve, or 
to feel assured [that it might not grow worse, and all have 
spent money grudgingly. The masses have bought only the 
bare necessities of living. 

If the 70,000,000 of people in the United States were to 
begin to supply one-half their normal needs, merchants 
would be run off their feet and the mills would run day and 
night. 

Building of all kinds has, for two or three years, been 
almost suspended. Carpenters, masons, plasterers, painters, 
architects and contractors have been either idle or seeking a 
subsistence at other trades or callings. If the people were 



DOLI.ARS, OR WHAT ? 93 

to start to building one-half the houses they want, these men 
could return to the old work busy as bees. 

No railroad in the country has its normal supply of equip- 
ment. It would be safe to say that there are 100,000 to 
150,000 broken-down and side-tracked cars in the country, 
and no need for half as many more new ones. Other equip- 
ments, including rails, are in similar condition. Twenty-five 
to thirty thousand miles of new lines, surveyed or projected, 
are awaiting construction. '^ 

Money by the hundreds of millions lies idle in the money 
centers of the country. Its owners are chafing little less 
than the idle workingmen. They are anxious to put it into 
the channels of trade and industry. The general situation 
never had a stronger back-bone. 

But the free silver nightmare stands iu the way. 

Men will not put out dollars this year with the probabil- 
ity that they may be returned next year in fractions of 
dollars. They will not lend or invest on a gold basis while 
there is a prospect of payment and return on a silver basis. 

This does not apply only to the large owners of money, 
but to the small holders as well. And it is the small holders 
who give life to all enterprise and industry. 

Nor will anybody invest in the face of a growing doctrine 
that would, if it should prevail, involve the country in general 
calamity. This is indeed the greatest deterrent to any 
movement of money: Its effect is much greater than even the 
well-defined apprehension of returns in cheap dollars. 

The only reason that there has been anything at all doing, 
and the only thing that has saved the country from complete 
financial collapse, is the faith of a large part of the people 
that there is too much hard, common sense in the country to 
permit further silver legislation. 

There is a well defined belief that the twenty years 
campaign of the silver barons of the West has reached its 
culmination. And this belief is well grounded, if by proper 
currency revision their allies in other sections are won 
from them. 

The needs of the people, so long and rigidly curtailed, are, 
to some extent, stimulating trade, and if we should have even 
a little prosperity to give employment and encouragment, the 
silver doctrine would lose its hold in many quarters. 

And as it wanes, and as sensible financiering prevails, 
prosperity will rise and spread over the land. 



94 DOIyLARS, OR WHAT? 



WHICH DO YOU PREFER? 

GOLD STANDARD. \ 
Gold $ 626,000,000 Present stand- 
Silver 625,ooo,ooo( ard of the Uni- 

Uncovered Paper 475,000,000) ted States. 

^ ' i Bureau of the 

Total present stock of money, ) Mint estimates, 

gold value $1,726,000,000/ 1894 Report. 

$25.00 PER CAPITA. 

SILVER STANDARD. \ 

Silver $ 625,000,000 \ 

Uncovered Paper 475,000,000/ This would be 

' ^ ' , -, , , . f the first and im- 

Total stock and debt paymg \ mediate result of 

value under free coinage $i,ioo,ooo,ooof Free Silver. 

Divided by .2)$!, 100,000,000 \ 

Purchasing Value $ 550,000,000/ 

$16.00 PER CAPITA, FACE VALUE. 

$ 8.00 PER CAPITA, TRUE VALUE. 

FLUCTUATING DAILY. 



NOTE TO SECOND EDITION. 

Since the greater part of the type for this work was set in permanent 
form the writer has learned that his references to a bank note circulation 
have been construed, in some quarters, to mean that he favors an uncon- 
ditional repeal of the State bank tax. He meant to convey no such idea. 
He is opposed to anything of the kind. No banking system not under the 
direct control of the government can be safe or desirable. 

As a parting word to some of the critics of the articles referred to, the 
writer desires to say, that the man who is unable to see that our banking 
laws need revision, does not look beyond the horizon of his own environ- 
ments, and that of the money centers. 

And in times of the active employment of money, the want of an elastic 
currency is often as severely felt in New York as elsewhere. Great scarcity 
of money and excessive rates of interest are not unusual in that center. 
Such conditions frequently exist when the movement of currency is active ; 
and in consequence the business world is nervous and anxious. 

On more than one occasion within the past eight years the country has 
been on the verge of panic from a stringency of money in New York. On 
one or two occasions the administration came to the rescue of the banks by 
making deposits of government funds, and at another time United States 
bonds were bought to relieve the strain. And in 1887, when money was 
going South and West in large volumes, serious apprehension was felt in 
the East. The writer remembers receiving at the time letters from New 
York bankers expressing concern as to the drain on New York banks. At 
such times the rate on call loans in New York has ranged from 15 to 50 per 
cent, and even as high as 100 per cent. No such condition would be possible 
if our currency were elastic. The panic of 1893 would doubtless have been 
averted if the banks had been permitted to issue an emergency circulation. 

The obstinate opponents of a sensible and material revision of our bank- 
ing laws are blind. And it is against such short-sightedness and obstinacy 
that the free silver and inflation element is blindly and furiously striking. 
The country must either revise its banking system or go, sooner or later, to 
a silver basis. The free silver element in the South, and in Ohio, Illinois, 
Indiana and other states, must be detached from the mine owning West. 

There should be no foolish, unsafe currency legislation, nothing that 
would authorize bank notes less safe than the notes of the national bank ; 
but this circulation can be made less rigid, and still be safer than any bank 
note currency in the world, and also safe from inflation. 

We do not want any mixed bank note system, that is to say, there should 
be but one system, and but one kind of banks allowed to issue money. We 
already have too many kinds of money. There should be but one kind of 
paper money in the country, and that should be issued directly by banks 
under one general system, and under direct control of the government. 

In authorizing such system, provision should be made for the gradual 
retirement of every dollar of paper money bearing the stamp of the United 
States. It might not be wise to do all this at once, but in all currency 
legislation that end should be kept in view. 

Fortunately the blind advocates of our present inflexible currency system 
are in a great minority, and it is to be hoped that there is enough wisdom 
among the sound money men of the Bast, and elsewhere, to shape public 
sentiment in favor of a sensible revision of the currency laws. 



(95) 



til 



PRESS COMMENTS. 

" Dollars, or What, contains the soundest and most candid presentation 
of the financial question that we have yet seen, and it is sure to be a salu- 
tary antidote to the poisonous stuff put forth in ' Coin's Financial School,' 
and similar publications. * * * It ought to be in the hands of every 
voter." — Rhodes' Journal of Bankings N. Y. 

" Dollars, or What, not only answers ' Coin,* but completely annihilates 
the very basis of Coin's argument." — Sioux City (Iowa) Tribune. 

"It meets Harvey effectually — in a direct, simple way, which anybody 
can understand." — Hartford {Qonn.) Times. 

"Mr. Mitchell is a bimetallist of rare financial and literary ability. "-^U 
Bonforfs Wine and Spirit Circular, N. Y. 4| 

" The book is undoubtedly a valuable contribution to the literature of the 
currency question." — The (Chicago) Israelite. 

"A brief and practical statement of the effect of unlimited coinage." — 
Atlanta (Ga.) Journal. 

" Its language is simple, plain and temperate, its arguments clear and 
concise, and its exposure of some of the financial fallacies of the day com 
plete." — Farm and Fireside, Springfield, Ohio. 

"A strong and very readable argument against the free coinage of sil* 
ver." — Philadelphia News. 

" Dollars, or What, takes all the wind out of Coin's Financial School. 
New York Mail and Express. 

"A valuable contribution to the currency controversy." — Rochester 
(N. Y.) Herald. 

The Argus, Portland, Me., referring to extracts from Dollars, or What, 
says: " They are readable ; they are exact ; they are as full of meat as an 

" Dollars, or What, most clearly sets forth the whole system of finance." 
Chattanooga Press. 

"Dollars, or What, will have a large circulation." — Norfolk Virginian. 

" Mr. Mitchell is an interesting writer, and though his views are entirely 
opposed to those of the majority of the people of the South, his treatment 
of the question bespeaks his ability." — Atlanta Constitution. 

"A forcible exposure of the errors of the silverites." — The Herald, Utica, 
N. Y. 

" Mr. W. B. Mitchell * * has taken time to give a set of clear, force- 
ful arguments in behalf of sound money, that can be * * * easily 
understood." — Daily State Gazette, Trenton, N. J. 

"Written in an easy, attractive style, that will make it popular with the| 
people." — The Financier, N. Y. J 

"There is no doubt of there being a great popular demand for the work.**^ 
Kansas City Mail. 

"The best work yet written on the financial question." — Paris (Texas) 
Daily News. 

"This little book is bound to be of great service to the cause of soundj 
money." — Financial Index, Atlanta, Ga. 

(96) 



YB 18333 



UNIVERSITY OF CAIvIFORNIA IvIBRARY 



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